24th successive decline: rupee depreciates against US dollar, settles over 230

Pakistani rupee continued to fall against the US dollar for the 24th successive session, as it depreciated 0.21% in the inter-bank market on Monday.

As per the State Bank of Pakistan (SBP), the rupee declined by Re0.48 to close at 230.15. During the ongoing fiscal year, the rupee has depreciated 11.12% against the greenback.

During the previous week, the rupee’s losses in the inter-bank market continued as the currency extended its depreciation run to 23 successive sessions against the US dollar.

While Pakistan has been unable to secure dollar inflows, the government and the SBP have resorted to administrative measures to control foreign currency outflow. These have included delays in opening letters of credit, increasing the backlog of such cases, and prompting the business community to raise concerns about the country’s raw material and commodity stocks.

The rupee is likely to remain under pressure amid a low level of forex reserves, with experts calling for the revival of the International Monetary Fund (IMF) programme.

Globally, the dollar index fell 0.3% as the euro climbed on hawkish comments by a European Central Bank member on European interest rates, combined with investors pricing in a lower terminal rate from the US Federal Reserve.

Softer US inflation, coupled with recent weak consumer and manufacturing data, has prompted these bets. In 2022, the Fed raised rates by 425 bps, with the bulk in 75-bps increments.

US GDP and producer price index prints due later this week will be crucial to gauge how the economy was holding up just before the Fed meeting.

Oil prices, a key indicator of currency parity, drifted lower in early trade on Monday, thinned by the Lunar New Year holiday in east Asia, but held on to most of last week’s gains on the prospect of an economic recovery in top oil importer China this year.

Inter-bank market rates for dollar on Monday

BID Rs 230.15

OFFER Rs 231.15

Open-market movement

In the open market, the PKR lost 50 paisas for both buying and selling against USD, closing at 238.25 and 240.50, respectively.

Against Euro, the PKR lost 1.50 rupees for both buying and selling, closing at 271.00 and 273.50 respectively.

Against UAE Dirham, the PKR lost 50 paisas for buying and 40 paisas for selling, closing at 69.50 and 70, respectively.

Against Saudi Riyal, the PKR lost 50 paisas for both buying and selling, closing at 67 and 67.50, respectively.

Open-market rates for dollar on Monday

BID Rs 238.25

OFFER Rs 240.50