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Rupee declines significantly, settles at 284.03 against US dollar

  • Currency depreciates 0.82% in inter-bank market
Published March 20, 2023 Updated March 22, 2023

The Pakistani rupee sustained significant losses against the US dollar, depreciating 0.82% in the inter-bank market on Monday as uncertainty over the resumption of a stalled International Monetary Fund (IMF) programme and a rise in domestic political noise dented market sentiments.

As per the State Bank of Pakistan (SBP), the rupee settled at 284.03, a fall of Rs2.32.

During the previous week, the rupee had depreciated a marginal 0.33%, aided by recovery on the final two days to settle at 281.71 against the US dollar in the inter-bank market.

An improving foreign exchange position on the back of loan inflows from Chinese institutions helped maintain the rupee’ stability, but the market remains concern over the resumption of the crucial International Monetary Fund (IMF) programme. Pakistan is awaiting a bailout package of $1.1 billion, which has been delayed since November over issues related to fiscal policy adjustments.

In a key development, the IMF also reportedly rejected speculations of any condition being attached to Pakistan's missile or nuclear program.

‘No compromise on nuclear’: Ishaq Dar

Market experts attributed the latest decline to a number of factors ranging from delays in the bailout programme resumption to the ongoing political uncertainty on the domestic front.

The global lender wants Pakistan to secure assurance from “friendly countries” to fund a balance of payment gap, which remains a hurdle in securing the IMF deal.

“The market is not seeing the resumption of the IMF programme in the coming days,” Saad Khan, Head of Research at IGI Securities, told Business Recorder.

“It's not only Pakistan but globally we are seeing more and more difficulties in securing IMF bailouts, given the strict debt restructuring,” added Saad.

Moreover, the market expert shared that the country’s bond yields are fluctuating at 20% to 40% level in the international market.

He also pointed out that the ongoing political unrest in the country is "very alarming".

“These factors are hammering the pathway to economic recovery,” he added.

Saad said markets are expected to remain under pressure until a positive development materialiaes. “The appreciation of rupee does not remain in sight at the moment,” he said.

Globally, currency markets showed some cautious optimism after global authorities moved to stem contagion from a simmering banking crisis, with the safe haven dollar on the back foot and the yen tumbling amid a rebound in Treasury yields.

Over the weekend, the Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, Bank of Canada and Bank of Japan announced joint action to enhance market liquidity.

That followed Swiss authorities’ negotiation of a buyout of Credit Suisse by UBS, but at a huge discount and with massive debt write-downs.

Oil prices, a key indicator of currency parity, fell on Monday to their lowest in 15 months on concerns risks in the global banking sector may cause a recession that would lead fuel demand to decline and ahead of a potential hike in US interest rates this week.

Inter-bank market rates for dollar on Monday

BID Rs 284.00

OFFER Rs 285.50

Open-market movement

In the open market, the PKR lost 1 rupee for both buying and selling against USD, closing at 283 and 286, respectively.

Against Euro, the PKR lost 1 rupee for both buying and selling, closing at 300 and 303 respectively.

Against UAE Dirham, the PKR lost 20 paisa for both buying and selling, closing at 77.20 and 77.90, respectively.

Against Saudi Riyal, the PKR lost 30 paisa for both buying and selling, closing at 75.30 and 76.00, respectively.

Open-market rates for dollar on Monday

BID Rs 283

OFFER Rs 286


Comments are closed.

omer Mar 20, 2023 04:44pm
plz do some responsible reporting. your report title says rupee settles at 283.12 whereas the closing rate is 284.03.
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bonce richard Mar 20, 2023 05:19pm
Day by day our currency is going down by the grace of the Almighty of Shahbaz Sharif and corrupted chor and the criminal army of the Islamic Republic of Pakistan.
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