Rupee marginally weakens against US dollar, settles at 221.91

Pakistan’s rupee registered a decline for the third consecutive session, falling 0.1% against the US dollar in the inter-bank market on Tuesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 221.91 after a depreciation of Re0.22.

On Monday, the rupee had registered a marginal decline, settling at 221.69 after a depreciation of Re0.05 or 0.02% against the US dollar.

Experts have attributed the rupee's fall to declining foreign exchange reserves and a rising import bill.

In a key development, State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Monday that the central bank has sufficient stocks of foreign exchange reserves and Letter of Credits (LC) cases up to $100,000 will be cleared by the end of this week.

The central bank chief also said that the SBP inspection team is investigating several banks for manipulation of exchange rate and the investigation will be completed by the end of this month.

“There are no specific banks. We are looking at the business volume of foreign exchange of the banks and the scope of investigation has expanded to several banks,” he added.

Globally, the US dollar climbed versus the yen and stayed firm against other major peers on Tuesday as more Federal Reserve officials made the case for even tighter US monetary policy.

The dollar index, which measures the currency against six counterparts including the yen, euro and sterling, edged 0.03% higher to 107.00 early in the Asian day.

The index tumbled 3.9% last week, its worst performance since March 2020, after US consumer prices rose less than expected, stoking speculation a peak in rates might be close.

Money markets are currently pricing in an 89% probability that the Federal Open Market Committee (FOMC) will slow the pace of hikes to a half point at its next meeting on December 14, against 11% odds for another 75 basis point increase.

Oil prices, a key indicator of currency parity, held steady on Tuesday as rising COVID-19 cases in China sparked fears of lower fuel consumption from the world’s top crude importer and a cut in OPEC’s 2022 global demand forecast offset worries about tight supply.

Inter-bank market rates for dollar on Tuesday

BID Rs 222

OFFER Rs 223

Open-market movement

In the open market, the PKR remained unchanged for both buying and selling against USD, closing at 225.50 and 227.75, respectively.

Against Euro, the PKR lost 1.50 rupees for both buying and selling, closing at 241.50 and 243.50 respectively.

Against UAE Dirham, the PKR lost 20 paisas for both buying and selling, closing at 64.50 and 65, respectively.

Against Saudi Riyal, the PKR lost 20 paisas for both buying and selling, closing at 62.50 and 63, respectively.

Open-market rates for dollar on Tuesday

BID Rs 225.50

OFFER Rs 227.75