Rupee closes with 0.46% fall, settles at 217.66

The rupee closed with a drop of 0.46% against the US dollar in the inter-bank market on Tuesday after a volatile ride that saw it register a gain in the early hours of trading.

As per the State Bank of Pakistan (SBP), the rupee closed at 217.66 after depreciating Re1 or 0.46%.

Rupee registers 0.93% fall against US dollar amid political noise

On Monday, Pakistan's rupee registered a drop of 0.93% or Rs2.01 to settle at 216.66 against the US dollar as political noise engulfed the market.

Additionally, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) in line with market expectations decided to maintain the policy rate at 15%, citing some positive developments on the domestic and external front.

“This will positively affect the markets,” said Trust Securities and Brokerage Limited (TSBL) in a note on Tuesday.

The MPC projected that headline inflation may surge to its peak in the first quarter of this fiscal year before declining gradually through the rest of the year.

On a positive note, foreign exchange reserves are likely to reach around $16 billion during FY23, said the MPC, supported by the completion of the upcoming International Monetary Fund (IMF) review and the additional inflows from friendly countries. The reserves' level is crucial to give stability to the currency.

On the other hand, domestic political tensions remain high, adding to market uncertainty.

The ongoing “political uncertainty would negatively affect the rupee”, said TSBL.

Meanwhile, oil prices, a key determinant of currency parity, rose on Tuesday as concerns over tight supply dominated market sentiment after Saudi Arabia warned that the major oil producer could cut output to correct a recent oil price decline.

On Tuesday, the dollar held firm on safe-haven flows as Europe confronts energy supply and broader economic growth concerns. Against a basket of currencies, the US dollar index stood firm at 108.9, attempting to breach a two-decade high of 109.29 hits in July.

Meanwhile, Pakistan now also expects to receive $2 billion from Qatar after it was reported that the South Asian nation will get bilateral support to help ease its financing crunch.

Inter-bank market rates for dollar on Tuesday

BID Rs 217.50

OFFER Rs 218.50

Open-market movement

In the open market, the PKR remained unchanged for both buying and selling against USD, closing at 220 and 222, respectively.

Against Euro, the PKR lost 3 rupees for both buying and selling, closing at 223 and 225 respectively.

Against UAE Dirham, the PKR lost 80 paisas for both buying and selling, closing at 62 and 62.50, respectively.

Against Saudi Riyal, the PKR lost 1.20 rupees for both buying and selling, closing at 59.50 and 60, respectively.

Open-market rates for dollar on Tuesday

BID Rs 220

OFFER Rs 222