- Some analysts expect rupee to come under some pressure as Pakistan moves to import more essential commodities in the wake of floods
Pakistan's rupee sustained losses against the US dollar in the inter-bank market, depreciating 0.4% on Monday.
As per the State Bank of Pakistan (SBP), the rupee closed at 219.86 after declining by Re0.88 against the greenback. It had closed at 218.98 on Friday.
The rupee had remained largely stable during the previous week, gaining 0.8% against the US dollar as the market factored in the revival of the International Monetary Fund (IMF) programme.
The rupee’s movement in the open market also grabbed attention as the spread narrowed with rates in the inter-bank.
Analysts expect the rupee to come under some pressure as Pakistan moves to import a higher amount of essential commodities in the wake of floods in the country. However, many also believe that the demand could be suppressed, keeping the current account balance in check.
Despite government measures, Pakistan’s trade deficit widened by 28.89% on a month-on-month basis to $3.53 billion in August 2022 when compared to $2.739 billion in July 2022.
Globally, the dollar hit a 20-year high against a basket of peers on Monday, with sterling and the euro the biggest losers as Russia's halt on gas supply down its main pipeline to Europe has sparked concerns over energy prices and growth.
The US dollar index hit a new two-decade high, surging to 110.08.
Meanwhile, oil prices, a key determinant of currency parity, rose more than $2 a barrel on Monday, extending gains as investors eyed possible moves by OPEC+ producers to cut output and support prices at a meeting later in the day.
Inter-bank market rates for dollar on Monday
BID Rs 219.90
OFFER Rs 220.90
In the open market, the PKR lost 7 rupees for both buying and selling against USD, closing at 230 and 232, respectively.
Against Euro, the PKR lost 8 rupees for both buying and selling, closing at 228 and 230 respectively.
Against UAE Dirham, the PKR lost 3 rupees for both buying and selling, closing at 64 and 64.50, respectively.
Against Saudi Riyal, the PKR lost 2.30 rupees for both buying and selling, closing at 61.30 and 61.80, respectively.
Open-market rates for dollar on Monday
BID Rs 230
OFFER Rs 232