Rupee remains stable against US dollar in inter-bank market
- Currency ends session unchanged at 224.94
After witnessing marginal improvement in the opening hours of trading, Pakistan’s rupee ended the session unchanged against the US dollar in the inter-bank market on Monday.
As per the State Bank of Pakistan (SBP), the rupee closed at 224.94. The rupee has depreciated by 21.57% against the US dollar during the ongoing calendar year.
Rupee remains under pressure against US dollar
During the previous week, the rupee depreciated only 0.24% in the inter-bank market, according to SBP data, but the simultaneous prevalence of a ‘black market’ and US dollar’s reported shortage with Exchange Companies (ECs) emerged as a source of worry for customers and policymakers in the past week.
The rupee’s stable ground in the inter-bank market came in stark contrast to the situation with foreign exchange reserves held by the SBP that continued to stay at a four-year low, clocking in at $6.7 billion.
The market found some solace from a lower current account deficit, which shrank to $0.28 billion in November 2022, according to data released on Friday. However, an inability to secure dollar inflows and the US Federal Reserve’s tightening stance together with stalled talks between Pakistan and the International Monetary Fund (IMF) will likely maintain pressure on the markets.
Globally, the dollar edged lower in Asia trade, with sterling GBP last 0.35% higher at $1.2183, after falling 1% last week as investors bet that the Bank of England (BoE) might be getting close to the end of its rate-hike cycle.
A slew of central bank meetings last week saw the BoE, the US Federal Reserve and the European Central Bank (ECB) each raising rates by 50 basis points, with the Fed and the ECB delivering hawkish messages and pledging more hikes ahead, even at the risk of hurting growth.
US business activity contracted further in December as new orders slumped to the lowest level in just over 2-1/2 years, S&P Global said on Friday in its flash U.S. Composite PMI Output Index.
The US dollar index slipped 0.19% to 104.61.
Oil prices, a key indicator of currency parity, rose on Monday after tumbling by more than $2 a barrel in the previous session as optimism over the Chinese economy outweighed concern over a global recession.
Inter-bank market rates for dollar on Monday
BID Rs 224.9
OFFER Rs 225.9
In the open market, the PKR remained unchanged for both buying and selling against USD, closing at 231.70 and 234, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 256 and 258 respectively.
Against UAE Dirham, the PKR lost 20 paisas for both buying and selling, closing at 67.50 and 68, respectively.
Against Saudi Riyal, the PKR remained unchanged for both buying and selling, closing at 64.30 and 64.80, respectively.
Open-market rates for dollar on Monday
BID Rs 231.70
OFFER Rs 234