KARACHI: Marred by political and economic uncertainty, the Pakistani rupee during the outgoing week declined 3.95% against the US dollar in the inter-bank market, dropping below the 200 level for the first time in its history to end at a record 200.14 on Friday.
During the week, uncertainty loomed regarding the resumption of the $6 billion International Monetary Fund (IMF) programme, while escalating political noise compounded the situation further.
The US dollar continued to gain strength against the rupee in all five sessions, as depleting foreign exchange reserve put severe downward pressure on the currency — the country has import cover of less than two months while significant external debt maturities appear on the horizon. On Wednesday, Pakistan and the IMF commenced talks in Doha in a renewed effort to strike a staff-level agreement for the resumption of the stalled $6-billion Extended Fund Facility programme.
The market expects the currency to remain under pressure until results from the talks with IMF are not achieved. On Thursday, the government in its bid to arrest the outflow of vital foreign exchange decided to impose a ban on the import of 38 non-essential luxury items. It believes the ban will yield $6 billion annual saving in foreign exchange reserves.
On the positive side, the current account deficit figures for the month of April showed a marked improvement from $1.02 billion in March 2022, to $623 million in April 2022. The 39% decline comes on the back of a rise in workers’ remittances worth $315 million and a fall in imports by $246 million.
Open-Market rates: In the open market, the PKR lost 6.10 rupees for buying and 6.30 rupees for selling against USD, closing at 199.50 and 201, respectively.
Against Euro, the PKR lost 8 rupees for both buying and selling, closing at 210 and 212, respectively.
Against UAE Dirham, the PKR lost 2.10 rupees for buying and 2.20 rupees for selling, closing at 54.70 and 55.20, respectively.
Against Saudi Riyal, the PKR lost 1.80 rupees for both buying and selling closing, at 53 and 53.50, respectively.
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THE RUPEE
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Weekly Interbank market rates for dollar
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Bid Close Rs. 199.80
Offer Close Rs. 200.20
Bid Open Rs. 192.40
Offer Open Rs. 192.60
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Weekly Open market rates for dollar
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Bid Close Rs. 199.50
Offer Close Rs. 201.00
Bid Open Rs. 193.40
Offer Open Rs. 194.70
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Copyright Business Recorder, 2022
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