KARACHI: The rupee registered minor depreciation across all five sessions during the previous week to end with a cumulative fall of 0.32% against the US dollar in the inter-bank market.
However, worries have grown over that while the rupee’s remained perceivably stable in the inter-bank market, closing at 224.4 on Friday, a simultaneous prevalence of a so-called ‘black’ or ‘informal’ market has seen trades at over Rs240 to the US dollar.
In the absence of effective administrative mechanisms, those seeking the US dollar have been forced to cough up higher ‘premiums’ to rates prevailing in the inter-bank market as Pakistan faces shortage of foreign currency reserves.
During the week, the State Bank of Pakistan (SBP) reported that its foreign currency reserves have fallen to $6.7 billion, barely enough to cover 1.5 months of imports. The reserves are at an almost four-year low, and fan concerns over Pakistan’s upcoming debt obligations.
In an in-house podcast, Jameel Ahmad, the SBP governor, moved to pacify concerns by breaking down debt repayments, and expected inflows, but stalled talks with the International Monetary Fund (IMF) and absence of tangible inflows from ‘friendly’ countries are likely to continue negative sentiment.
However, Pakistan may see some respite as international oil prices retreated to their biggest weekly declines in months, as growing recession fears negated any supply woes after weak economic data from China, Europe and the United States.
Low oil prices take some pressure off Pakistan’s import bill, which in turn helps the country’s current account deficit – a key number for the cash-strapped economy.
Open-market rates
In the open market, the PKR lost 45 paisas for buying and 50 paisas for selling against USD, closing at 229.70 and 232, respectively.
Against Euro, the PKR lost 2.50 rupees for both buying and selling, closing at 251 and 253, respectively.
Against UAE Dirham, the PKR lost 10 paisas for both buying and selling, closing at 65.80 and 66.30, respectively.
Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling, closing at 63.40 and 63.90, respectively.
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THE RUPEE
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Weekly Interbank market rates for dollar
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Bid Close Rs. 224.50
Offer Close Rs. 225.50
Bid Open Rs. 223.75
Offer Open Rs. 224.75
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Weekly Open market rates for dollar
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Bid Close Rs. 229.70
Offer Close Rs. 232.00
Bid Open Rs. 229.25
Offer Open Rs. 231.50
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Copyright Business Recorder, 2022
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