- Gains 0.03%, the first time since Sep 1 that the rupee has ended higher against US dollar
Pakistan’s rupee finally ended its 15-session depreciation run against the US dollar, and closed with a marginal gain of 0.03% in the inter-bank market on Friday.
As per the State Bank of Pakistan (SBP), the rupee closed at 239.65 after appreciating Re0.06 or 0.03%. During the last 16 trading sessions, the rupee has cumulatively declined by Rs21.05 or 8.8% against the US dollar.
On Thursday, Pakistan's rupee had remained largely stable against the US dollar, settling at 239.71 after declining by Re0.06 or 0.03% in the inter-bank market.
In a span of two months, the local currency has undergone a complete turnaround, approaching its all-time low against the US dollar in the inter-bank market, despite the disbursement of $1.16 billion tranche from the International Monetary Fund (IMF).
Later, the Saudi Development Fund also rolled over a $3-billion deposit with the SBP, an amount that was due to mature in December 2022.
However, the country’s reserves continue to decline, as foreign exchange reserves held by the central bank dipped $278 million, clocking in at $8.35 billion as of September 16, 2022, as per data released by SBP on Thursday.
Total liquid foreign reserves held by the country stood at $14.07 billion, said the SBP on Thursday. Net foreign reserves held by commercial banks amounted to $5.72 billion.
A low level of reserves is a negative for the currency market and adds pressure on the rupee, which witnessed its worst monthly performance in July in over 50 years.
Talking to local media, Finance Minister Miftah Ismail, who is in New York to attend the United Nations General Assembly (UNGA) session, said the government, being currently in an IMF programme, cannot intervene in the market.
“US dollar is strengthening against other currencies, whereas the perception of credit default risk of Pakistan has risen, affecting the dollar value, but it will come under control in coming days,” he said.
Globally, the US dollar maintained its grip against other currencies after the Federal Reserve raised the key US interest rate on Wednesday. It was the third consecutive increase of 75 basis points by the Fed's policy-setting Federal Open Market Committee (FOMC), taking the policy rate to 3.0-3.25%.
The U.S. dollar index rose 0.16% to 111.40, hovering near a two-decade high of 111.81 hit in the previous session, and is on track for a weekly gain of 1.5%.
Oil prices, a key determinant of currency parity, fell on Friday amid recession fears and a stronger US dollar, though losses were capped by supply concerns after Moscow’s new mobilisation campaign in its war with Ukraine and an apparent deadlock in talks on reviving the Iran nuclear deal.
Inter-bank market rates for dollar on Friday
BID Rs 239.75
OFFER Rs 240.75
In the open market, the PKR gained 50 paisas for both buying and selling against USD, closing at 242 and 244.40, respectively.
Against Euro, the PKR gained 4 rupees for both buying and selling, closing at 235 and 237.35 respectively.
Against UAE Dirham, the PKR gained 10 paisas for both buying and selling, closing at 65.90 and 66.55, respectively.
Against Saudi Riyal, the PKR gained 10 paisas for both buying and selling, closing at 64.25 and 64.90, respectively.
Open-market rates for dollar on Friday
BID Rs 242
OFFER Rs 244.40