Rupee continues to struggle, settles at 224.70 against US dollar

Pakistan’s rupee continued to fall against the US dollar, as the currency recorded a decrease for the seventh straight session, depreciating 0.02% in the inter-bank market on Tuesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 224.70 after a decline of Re0.05. The rupee has depreciated by 21.47% against the US dollar in the ongoing calendar year.

On Monday, the rupee had registered a loss for the sixth successive session against the US dollar to settle at 224.65 after a decrease of Re0.25 or 0.11%.

In a key development, it was reported that Pakistan will likely secure a multi billion-dollar financial support package from long-time ally Saudi Arabia this month.

Moreover, it was later learnt that the International Monetary Fund (IMF) executive board remains divided over Pakistan's and other countries' requests to suspend loan surcharges.

The United States, Germany, Switzerland and other advanced economies oppose a change, arguing that the fund should not change its financing model at a time when the global economy is facing significant headwinds.

Internationally, the dollar was firm on Tuesday leading up to the release of US inflation data and the final Federal Reserve meeting of the year, with investors waiting to update interest rate outlooks.

The US dollar has been supported by high and rising interest rate expectations as the Fed has hiked its benchmark funds rate to counter inflation, leaving the currency vulnerable to selling if inflation seems to be cooling.

The dollar index hovered at 104.97 on Tuesday, down from a 20-year high of 114.78 in late September.

Oil prices, a key indicator of currency parity, extended gains on Tuesday as a key pipeline bringing supply to the United States remained shut, adding to concerns about potential tightness in the world’s biggest crude consumer.

Inter-bank market rates for dollar on Tuesday

BID Rs 224.75

OFFER Rs 225.75

Open-market movement

In the open market, the PKR lost 20 paisas for buying while remaining unchanged for selling against USD, closing at 231.70 and 234, respectively.

Against Euro, the PKR lost 50 paisas for both buying and selling, closing at 252 and 254 respectively.

Against UAE Dirham, the PKR lost 40 paisas for both buying and selling, closing at 66.70 and 67.20, respectively.

Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling, closing at 63.80 and 64.30, respectively.

Open-market rates for dollar on Tuesday

BID Rs 231.70

OFFER Rs 234