No respite as rupee closes at 209.96 against the US dollar

The rupee extended losses for the seventh consecutive session against the US dollar on Monday, as uncertainty around the International Monetary Fund’s (IMF) bailout programme and falling foreign exchange reserves continued to take a toll on the local currency.

During intra-day trading, the currency fell to as low as 210.19 before making a marginal gain against the greenback by the end of the session.

At close, the local currency finished with a loss of Rs1.21 or 0.58% to close at 209.96 to the dollar.

On Friday, the rupee had closed at 208.75 due to panic over the IMF's $6 billion Extended Fund Facility (EFF) and the fall in foreign exchange reserves held by the State Bank of Pakistan (SBP).

Last week, the rupee endured a 3.1% fall over the course of five sessions in the inter-bank market.

During the course of the week, increased uncertainty over the EFF was witnessed as reports indicated that the lender was displeased with the Pakistan budget, driving negative sentiment over the programme.

Meanwhile, foreign exchange reserves held by the SBP fell under $9 billion, which added to the woes of the local currency.

“The major issue is uncertainty pertaining to revival of the IMF programme, which is leading to the local currency depreciation,” Abdullah Umer, an analyst at Ismail Iqbal Securities, told Business Recorder.

The analyst said there are reports regarding a shortage of dollars in the inter-bank, which has added pressure on the rupee. He also said that a slowdown in remittance flows is expected in coming days, amid a resumption of travel, which may further dent the forex reserves position and in the process the local currency as well.

On the other hand, the Pakistani business community urged the central bank to control the continuous nosedive of the Pakistani rupee against the US dollar.

Vice President of Pakistan Businesses Forum (PBF) Ahmad Jawad recently said the rupee's depreciation during the PTI government in the name of a “market-determined” exchange rate was a blunder, and now the PML-N government is continuing the same mistake.

He said Pakistan cannot afford a “dollarised” economy and the government should control dollar flight without any further delay.

“Dollarisation is a situation when the local currency loses its stability as a medium of exchange due to hyperinflation or instability and the same is happening in Pakistan,” he said.

Inter-bank market rates for dollar on Monday

BID Rs 210

OFFER Rs 210.20

Open-market movement

In the open market, the PKR lost 1.50 rupees for both buying and selling against USD, closing at 211.50 and 213.50, respectively.

Against Euro, the PKR lost one rupee for both buying and selling, closing at 222 and 224, respectively.

Against UAE Dirham, the PKR lost 90 paisas for buying and one rupee for selling, closing at 58 and 58.50, respectively.

Against Saudi Riyal, the PKR lost 60 paisas for buying and 70 paisas for selling, closing at 56.50 and 57, respectively.

Open-market rates for dollar on Monday

BID Rs 211.50

OFFER Rs 213.50