Rupee falls 0.43% against US dollar as political temperature rises

Pakistan’s rupee reverted to its old ways against the US dollar, and registered a depreciation of 0.43% in the inter-bank on Wednesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 220.68 after depreciating Re0.95.

On Tuesday, Pakistan’s rupee had recorded a gain for the third successive session against the US dollar, and closed at 219.73 after appreciating Re0.68 or 0.31% in the inter-bank.

Experts attributed the rupee’s decline to an increase in political temperature after Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan on Tuesday announced to start a ‘long march’ from Lahore to Islamabad on Friday (October 28).

“Rupee weakened because of political noise,” said Samiullah Tariq, Head of Research at Pak Kuwait Investment Company Limited, in a note.

The ‘Haqeeqi Azadi’ march will begin from Liberty Chowk at 11 am and will make its way to Islamabad through GT Road.

Addressing a press conference, former prime minister Imran Khan said that there was no time-frame for the conclusion of the long march.

Internationally, the dollar wallowed near a three-week low versus major peers on Wednesday as more signs of economic weakness in the United States fanned speculation about a less hawkish Federal Reserve.

Data overnight showed that US home prices sank in August as surging mortgage rates sapped demand, amid recent signs that Fed rate increases are already working to slow the world’s biggest economy.

The dollar index - which measures the currency against six peers, including sterling, the euro and the yen - was little changed at 111.01, near the previous session’s trough of 110.75, the lowest level since Oct. 5.

Oil prices, a key indicator of currency parity, were broadly stable on Wednesday, moving in and out of negative territory after industry data showed US crude stockpiles rose more than expected, though supply concerns and a weaker dollar gave support.

Inter-bank market rates for dollar on Wednesday

BID Rs 220.70

OFFER Rs 221.70

Open-market movement

In the open market, the PKR lost 1.50 rupees for both buying and selling against USD, closing at 222.20 and 224.40, respectively.

Against Euro, the PKR lost 4 rupees for buying and 4.05 rupees for selling, closing at 222.50 and 224.70 respectively.

Against UAE Dirham, the PKR lost 30 paisas for both buying and selling, closing at 63.70 and 64.30, respectively.

Against Saudi Riyal, the PKR lost 45 paisas for buying and 50 paisas for selling, closing at 59 and 59.60, respectively.

Open-market rates for dollar on Wednesday

BID Rs 222.20

OFFER Rs 224.40