- During the session, rupee even crossed 204 against the US dollar before making a recovery
The rupee weakened further in the inter-bank market, closing at 202.83 against the US dollar on Tuesday. This is its lowest closing level in history.
During the session, the rupee remained under pressure and even hit the 204 level before making a recovery.
As per the State Bank of Pakistan (SBP), the currency closed at 202.83 after a day-on-day depreciation of Rs2.77, or 1.37%.
On Monday, the currency had ended at 200.06 against the US dollar in the inter-bank market.
“Oil payments led to massive outflows, creating pressure on the rupee,” Wajid Rizvi, Head of Strategy and Economy at JS Global, told Business Recorder.
He said the government has been unable to finalise external funding agreements pertaining to LNG and inflows with Qatar and the UAE, respectively, which has dented sentiment as well.
“Rupee is expected to lose further ground, unless funding deals are secured,” he said.
The market expert said that the upcoming federal budget to be announced on June 10 would be 'fiscally regressive' and will be filled with measures to increase taxation.
"Probably a super tax could be levied on the energy sector. Such measures, albeit unpopular, would be needed to achieve the tax target," he said.
Meanwhile, Zafar Paracha, General Secretary of Exchange Companies Association of Pakistan (ECAP), informed that there is no demand for dollars in the open market.
"The reason behind the decline is due to irresponsible statements being given by the political parties – both in the government and opposition," he said.
"This has activated speculators in the banking sector, leading to a spike in dollar rate during the week," he said, urging the central bank to manage the volatility in the currency market.
Inter-bank market rates for dollar on Tuesday
BID Rs 202.30
OFFER Rs 202.60
In the open market, the PKR lost 2.50 rupees for both buying and selling against USD, closing at 202 and 203.50, respectively.
Against Euro, the PKR lost 50 paisas for both buying and selling, closing at 213 and 215, respectively.
Against UAE Dirham, the PKR lost 20 paisas for both buying and selling, closing at 55 and 55.50, respectively.
Against Saudi Riyal, the PKR lost 80 paisas for both buying and selling, closing at 54 and 54.50, respectively.
Open-market rates for dollar on Tuesday
BID Rs 202
OFFER Rs 203.50