Rupee settles with marginal drop against US dollar

The rupee registered a marginal decline of 7 paisas against the US dollar in the inter-bank market on Thursday, suggesting it has reached a short-term equilibrium.

As per the State Bank of Pakistan (SBP), the rupee settled at 214.95 against the US dollar after a fall of Re0.07 or 0.03%.

On Wednesday, the rupee had ended its 11-session appreciation run, as the local currency fell 0.46% to settle at 214.88 against the US dollar in the inter-bank market.

Since July 28, the rupee had registered a significant recovery against the US dollar on positive developments related to dollar inflows from the UAE, Saudi Arabia, and the International Monetary Fund (IMF).

Speaking at a summit in Islamabad on Wednesday, Finance Minister Miftah Ismail reiterated that the government's decision to curb imports led to a decline in outgoing dollars while easing pressure on the local currency.

“This month, there is a surplus of $700-800 million in the inter-bank market, as compared to the outflows. We have already made three-fourths of payments for August in the first week alone,” he said.

In a late-night development on Wednesday, the IMF also confirmed that its Executive Board meeting for the combined seventh and eighth reviews under the Extended Fund Facility (EFF) had been set for August 29.

Earlier, Miftah on Tuesday said that he was hopeful the IMF board would meet on August 29, after which the process to disburse funds to Pakistan will start.

Pakistan reached a staff-level agreement with the IMF authorities last month, and is now hoping for the Fund’s board approval for disbursement of $1.17 billion for the combined seventh and eighth review.

This will provide a much-needed boost to Pakistan's foreign exchange reserves which fell to $13.56 billion, as per the data last week. Of this, reserves held by the State Bank of Pakistan (SBP) were at an alarming level of $7.83 billion, not enough to provide 45-days of import cover.

Pakistan entered a 39-month, $6 billion IMF programme in 2019, however to date, less than half of the amount has been disbursed to the country.

This has put the rupee under severe strain that has seen volatile rides over the past few months.

Inter-bank market rates for dollar on Thursday

BID Rs 215

OFFER Rs 216

Open-market movement

In the open market, the PKR lost 2 rupees for both buying and selling against USD, closing at 217 and 219, respectively.

Against Euro, the PKR remained unchanged for both buying and selling, closing at 218 and 220 respectively.

Against UAE Dirham, the PKR lost 80 paisas for both buying and selling, closing at 59.50 and 60, respectively.

Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling, closing at 57.30 and 57.80, respectively.

Open-market rates for dollar on Thursday

BID Rs 217

OFFER Rs 219