Rupee seen stable around 221, finishes with marginal loss

Pakistan’s rupee posted a marginal decline against the US dollar, and depreciated 0.03% in the inter-bank market on Thursday.

As per the State Bank of Pakistan (SBP), the rupee closed at 220.95 after depreciating Re0.07. The rupee has cumulatively depreciated Rs3.16 or 1.43% in the last seven sessions.

On Wednesday, the rupee had registered a decline for the sixth straight session against the US dollar, and closed at 220.88 after depreciating Rs1.17.

As per market experts, weakness in the local currency is driven by dwindling foreign exchange reserves and uncertainty regarding inflow commitments.

Speaking to media after the 'All Pakistan Chartered Accountants Conference 2022 on Sustainability, Technology and Transformation in Islamabad', Finance Minister Ishaq Dar said the rupee was undervalued and it could soon recover to Rs200 per dollar mark, which is "its real value".

“I assure you that we have ample foreign exchange reserves and they will not pose a problem for the country,” he said.

Meanwhile, in another key development, the current account deficit (CAD) declined for the third straight month in a row in September. It fell to $0.3 billion, less than half the level in August. In Q1FY23, the CAD has fallen to $2.2 billion from $3.5 billion in Q1FY22, mainly due to a decline in imports.

Internationally, the dollar loomed over major peers on Thursday as Treasury yields peaked at multi-year highs, while the yen tumbled to a fresh 32-year low and kept markets on high alert for any signs of intervention.

The US dollar index was up 0.05% to 113.04, after a nearly 1% surge overnight.

Oil prices, a key indicator of currency parity, gained around $1 on Thursday as investor sentiment rose on news that China is considering a cut in the duration of quarantine for inbound visitors.

Inter-bank market rates for dollar on Thursday

BID Rs 220.95

OFFER Rs 221.95

Open-market movement

In the open market, the PKR gained 2.50 rupees for both buying and selling against USD, closing at 223.20 and 225.40, respectively.

Against Euro, the PKR gained 4.20 rupees for buying and 4.05 rupees for selling, closing at 218.30 and 220.45 respectively.

Against UAE Dirham, the PKR remained unchanged for both buying and selling, closing at 63 and 63.60, respectively.

Against Saudi Riyal, the PKR gained 75 paisas for buying and 80 paisas for selling, closing at 59.25 and 59.80, respectively.

Open-market rates for dollar on Thursday

BID Rs 223.20

OFFER Rs 225.40