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Rupee sees no respite, closes at all-time low of 200.14 against dollar

  • Lack of clarity on IMF front and looming political and economic uncertainty takes a toll on the currency
Published May 20, 2022

Diving past the 200 per dollar mark, the rupee failed to take a breather on Friday and inched downward to close at 200.14, down 0.07%, against the greenback in the inter-bank market.

This was in part down to lack of clarity on the International Monetary Fund (IMF) front and looming political and economic uncertainty and is a new all-time low for the currency.

During the day, the rupee fell as low as 201 per dollar in intra-day trading but market anticipation of positive news related to resumption of the IMF programme helped it recover marginally.

Talks between the global lender and Pakistan are underway to revive a $6 billion bailout programme, which is expected to provide a cushion to the dwindling economy and falling rupee.

But the foreign exchange market appeared to brush off this update as well as strong current account data for the month of April 2022, and the downtrend in the local currency persisted.

The local currency has been falling since April 30 as panic over depleting foreign exchange reserves, suspension of the IMF programme and continuation of fuel subsidy eroded market confidence.

April CA deficit dips 39pc to $623m MoM

It was revealed on Thursday that foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by $145 million between May 6 to May 13 to stand at $10.16 billion, with the level staying at less than 1.5 months of import cover.

SBP-held foreign exchange reserves plummet by $145mn to $10.16bn

Pak-Kuwait Investment Company Head of Research Samiullah Tariq told Business Recorder that the sole reason behind the current rupee fall was economic and political uncertainty.

“If the rupee is still on a decline despite a robust current account number, then it is only due to turbulence in the economy,” he said. “Moreover, lack of developments regarding the resumption of the IMF programme has depleted the confidence in the foreign exchange market.”

Speaking about the partial recovery posted by the local currency, from a low of 201 in intra-day trading, he said that the market expects encouraging news related to IMF programme over the weekend.

‘Emergency economic plan’ unveiled

Ismail Iqbal Securities Head of Research Fahad Rauf said lack of clarity over the direction of economy was hammering the rupee.

The currency's decline comes amid conflicting statements from the coalition government. One segment says that the leadership would prefer to step down rather than raise fuel prices while another segment says that the government will complete its term.

Speaking to Business Recorder, Rauf said: “There is a lot of confusion and this is expected to affect the IMF talks.”

But he was of the opinion that receding foreign exchange reserves were having little to no impact on the rupee’s value because they have been on a downtrend for a long time and the decline was flattening now.

Inter-bank market rates for dollar on Friday

BID Rs 199.80

OFFER Rs 200.20

Open-market movement

In the open market, the PKR lost 50 paisas for buying while remaining unchanged for selling against USD, closing at 199.50 and 201, respectively.

Against Euro, the PKR lost 1.50 rupees for both buying and selling, closing at 210 and 212, respectively.

Against UAE Dirham, the PKR gained 10 paisas for both buying and selling, closing at 54.70 and 55.20, respectively.

Against Saudi Riyal, the PKR lost 20 paisas for both buying and selling, closing at 53 and 53.50, respectively.

Open-market rates for dollar on Friday

BID Rs 199.50

OFFER Rs 201


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