Third successive loss: Rupee weakens further against US dollar
- The currency settles at 218.38 in inter-bank market
The Pakistani rupee registered a loss for the third successive session against the US dollar and depreciated 0.33% in the inter-bank market on Wednesday.
As per the State Bank of Pakistan (SBP), the rupee closed at 218.38 after depreciating Re0.72 or 0.33%.
On Tuesday, the rupee had closed with a drop of 0.46% to settle at 217.66 after a volatile ride that saw it register a gain in the early hours of trading.
“The ongoing political uncertainty is hurting market sentiment, leading to speculative behaviour among participants. Otherwise, there's not a lot of pressure from the import side to drive dollar demand,” Abdullah Umer, an analyst at Ismail Iqbal Securities, told Business Recorder.
The analyst was of the view that rupee depreciation is a temporary phenomenon, as inflows from the International Monetary Fund (IMF) and Qatar are expected in the coming weeks.
“Depending on the IMF's decision, an inflow of over a billion-dollars could be seen, while over $2 billion is expected from Qatar,” he said.
Meanwhile, Pakistan now also expects to receive an inflow from Qatar after it was reported that the South Asian nation will get bilateral support to help ease its financing crunch.
On Wednesday, it was learnt that the Qatar Investment Authority, one of the largest sovereign wealth funds in the world, is considering investing about $3 billion in different sectors of Pakistan's economy.
“This would improve Pakistan's liquidity position while strengthening the rupee to the 207-210 level,” added Umer.
Oil prices, a key determinant of currency parity, climbed above $100 a barrel on Wednesday after Saudi Arabia suggested this week that OPEC could consider cutting output in response to poor liquidity in the crude futures market and fears about a global economic downturn.
Moreover, the dollar index which measures the dollar against a basket of currencies, rose 0.1% to 108.70 on Wednesday, and July’s two-decade high of 109.29.
Inter-bank market rates for dollar on Wednesday
BID Rs 218.50
OFFER Rs 219
Open-market movement
In the open market, the PKR lost 7 rupees for both buying and selling against USD, closing at 227 and 229, respectively.
Against Euro, the PKR lost 3 rupees for both buying and selling, closing at 226 and 228 respectively.
Against UAE Dirham, the PKR lost 50 paisas for both buying and selling, closing at 62.50 and 63, respectively.
Against Saudi Riyal, the PKR lost one rupee for both buying and selling, closing at 60.50 and 61, respectively.
Open-market rates for dollar on Wednesday
BID Rs 227
OFFER Rs 229
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