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New historic low: rupee suffers another dramatic fall, closes at 285.09 against US dollar

  • Currency loses 6.66% or nearly Rs19 in a single session against the US dollar
Published March 2, 2023

The Pakistani rupee saw yet another dramatic fall in just over a month, plummeting 6.66% against the US dollar during the trading session on Thursday.

As per the State Bank of Pakistan (SBP), the rupee settled at 285.09 against the greenback, a decline of Rs18.98 in the inter-bank market.

Earlier during the day, the rupee had depreciated to 284.88 against the US dollar in the inter-bank market before posting a minor recovery that proved short-lived.

The rupee had plummeted against the US dollar on Wednesday as well but the fall was less severe as the currency settled at 266.11 after a depreciation of 1.73% or Rs4.61 in the inter-bank market.

The rupee had earlier suffered a dramatic fall when it went from 230.89 to 255.43 on January 26 as the government loosened what were seen as administrative measures to keep the currency in check.

In comments to Business Recorder, Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited (IISL), said the ongoing rupee’s depreciation is part of market correction.

“A significant gap in rates was created between the open and inter-bank markets, which became unsustainable,” said Rauf.

“Moreover, reports around International Monetary Fund (IMF) are also not positive, denting investor sentiment.”

He added volatility would remain until the IMF programme is revived and inflows are materialised.

In a note, CEO Topline Securities Mohammed Sohail said delay in the resumption of the IMF programme is leading to market volatility.

“Delay in IMF funding is creating uncertainty in currency market,” he said.

Tahir Abbas, Head of Research at Arif Habib Limited (AHL), said a number of payments related to imports have been made, leading to pressure on the rupee.

“As it is the start of the month, a number of import payments have been made. Moreover, the government has also loosened its administrative controls to appease the IMF,” he said.

A move to a market-based currency exchange rate regime is one of a list of actions the IMF wants Pakistan to complete to clear its 9th review.

Meanwhile, Pakistan has already taken most of the other prior actions, which include hikes in fuel and energy tariffs, the imposition of new taxation measures, and withdrawal of subsidies in export and power sectors.

“However, the depreciation would flare up inflation further,” said Abbas.

The development came on a day when the SBP was also expected to announce further monetary tightening to control inflation at the central bank’s emergency Monetary Policy Committee meeting.

In a key development, Pakistan’s trade deficit narrowed by 33.18% to $21.3 billion during the first eight months (July-February) of the current fiscal year 2022-23 as compared to $31.879 billion during the same period of last year, the Pakistan Bureau of Statistics (PBS) said.

Internationally, the dollar nursed losses on Thursday as optimism about China’s reopening was supported by encouraging data and underpinned Asian currencies, while sticky inflation had the euro eying its best week in a month and a half.

The dollar lost 0.9% on the euro overnight, and since it moved lower despite US yields rising some are speculating it might have peaked as February’s rally runs out of steam.

Oil prices, a key indicator of currency parity, inched up on Thursday, extending gains from the previous two sessions on signs of a strong economic rebound in China, the world’s top oil importer, though gains were capped by a rise in US crude inventories and concerns over overall global demand.

Inter-bank market rates for dollar on Thursday

BID Rs 285.10

OFFER Rs 288.10

Open-market movement

In the open market, the PKR lost 14 rupees for buying and selling against USD, closing at 285.00 and 288.00, respectively.

Against Euro, the PKR lost 11 rupees for buying and selling, closing at 297.00 and 300.00 respectively.

Against UAE Dirham, the PKR lost 2.30 rupees for buying and 2.20 rupees for selling, closing at 78.00 and 78.70, respectively.

Against Saudi Riyal, the PKR lost 3.50 rupees for buying and selling, closing at 75.50 and 76.20, respectively.

Open-market rates for dollar on Thursday

BID Rs 285

OFFER Rs 288


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Saad Mar 02, 2023 11:52am
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KhanRA Mar 02, 2023 12:39pm
This is the beginning of the end, my friends. Our country will be just a footnote in history. What fools we were to think we could expand our rule into Kashmir - we won’t even keep the flag flying over Karachi.
thumb_up Recommended (0) reply Reply
Arshad Mar 02, 2023 12:53pm
Welldone PDM (Pakistan Destruction Movement).........
thumb_up Recommended (0) reply Reply
Salim Mar 02, 2023 04:27pm
When you replace competent and honest people like Miftah Ismail see the results. Whatever punishment Ishaq Dar is given - if and when given- it will be less.
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bonce richard Mar 02, 2023 05:37pm
@KhanRA, Excellent Mr. Khan. We never fly our flag in Kashmir. We already lost one part in 1971 and at that time we had a fair election in the history of Pakistan. If our Govt publishes Hamid Ur Rehman's report that will be self-explanatory for all of them.
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bonce richard Mar 02, 2023 05:42pm
@Salim, Miftah Ismail is a businessman, and his whole family members donate money to a needy person, but unfortunately, he does not belong to the big province of Pakistan.
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Ch K A Nye Mar 02, 2023 08:33pm
@bonce richard, nor is he a member of that holy of holies group: the Sharif family.
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Awami Mar 03, 2023 02:31am
@Salim, Do not blame or single out one person, it is sysmatic problem.
thumb_up Recommended (0) reply Reply
MKA Mar 03, 2023 10:45am
Thank you Pakistan Tehrik e Ilzaam for you fitna and fasaad the followers qoam e loote.
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