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Rupee falls 0.35%, settles at 276.28 against US dollar

  • A day after recording some improvement, rupee is back under pressure
Published February 7, 2023

A day after recording some improvements, the Pakistani rupee was back under pressure against the US dollar, as it depreciated 0.35% in the inter-bank market on Tuesday.

As per the State Bank of Pakistan (SBP), the currency closed at 276.28 against the US dollar, a decline of Re0.98. The currency has depreciated by 25.82% during the ongoing fiscal year against the greenback.

The currency had registered some improvement on Monday, closing at 275.30 against the US dollar, an appreciation of Rs1.28 or 0.46%.

Today’s fall comes as technical-level talks between Pakistan and the International Monetary Fund (IMF) team are said to have concluded, while policy-level discussions were expected to start from today (Tuesday).

Sources on condition of anonymity told Business Recorder that the power sector’s untargeted subsidies were a major concern for the Fund as it wants to make them targeted. Another concern was that the primary deficit was considerably higher compared to the government estimates.

Meanwhile, Arif Habib Limited in a report released on Tuesday said: “Given the ongoing talks with the Fund and negotiations on major fiscal reforms, we believe the PKR will continue to remain volatile in the short term stabilizing as IMF review concludes and other bilateral and multilateral flows start pouring in.”

“Given the significant deterioration in external reserves position and repayments of more than $2 billion of commercial debt previously anticipated to be rolled over, we now expect Jun-23 and Dec-23 PKR/USD closing rate of 275 and 290 respectively,” it added.

Internationally, the dollar eased on Tuesday from its rally at the start of the week, but hovered near a one-month peak as traders raised their forecasts of US Federal Reserve interest rate levels needed to tame inflation.

The surging US currency pushed the US dollar index to a near one-month high of 103.76 on Monday, and it was last 0.15% lower at 103.45.

Gold prices rose as the dollar pulled back slightly, with traders awaiting Federal Reserve Chair Jerome Powell’s speech later in the day for hints about future rate hikes after last week’s strong economic data.

Oil prices, a key indicator of currency parity, were up for a second straight session on Tuesday, driven by optimism about recovering demand in China, and concerns over supply shortages following the shutdown of a major export terminal after an earthquake in Turkiye.

Inter-bank market rates for dollar on Tuesday

BID Rs 276.25

OFFER Rs 277.25

Open-market movement

In the open market, the PKR gained 3 rupees for both buying and selling against USD, closing at 278 and 280, respectively.

Against Euro, the PKR remained unchanged for both buying and selling, closing at 294.50 and 297 respectively.

Against UAE Dirham, the PKR gained 10 paisas for buying and 20 paisas for selling, closing at 75.70 and 76.30, respectively.

Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling, closing at 73.70 and 74.30, respectively.

Open-market rates for dollar on Tuesday

BID Rs 278

OFFER Rs 280

Comments

Comments are closed.

Eddie Feb 07, 2023 09:01pm
Pakistan has so badly been managed by political elites, over the decades,it's paying a hefty price now Any amount of money from the IMF and elsewhere will only be a patch in solving its financial woes.It needs to rethink its entire fiscal policy and bring in real honest politician who devotes his time and effort in building the Pakistan economy, like India did in1991 with Dr Manmohan singh as finance minister.
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Az_Iz Feb 08, 2023 05:30am
The incompetent Dar is still hanging around. Shameless guy.
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Az_Iz Feb 08, 2023 05:33am
Low savings rates for the country compared to other countries at similar levels of development is a big contributor to the economic problem. More saving and investment, means better growth, lower inflation and lower CAD.
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Humayun Feb 09, 2023 10:27am
Politicians are only the faces. The country is being mismanaged by the establishment, the incompetent lot.
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Abrar Feb 09, 2023 11:33am
@Az_Iz, And shameless and egoistic sponsors!
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Abrar Feb 09, 2023 11:34am
@Humayun, Indeed, nothing upstairs; their K2 high egos and "nothing upstairsness" divided the country and let to present economic meltdown!
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