Rupee remains under pressure, settles at 297.13 against US dollar

The Pakistan rupee remained under pressure against the US dollar, depreciating 0.45% in the inter-bank market on Monday.

At close, the rupee settled at 297.13, a decrease of Rs1.35, as per the State Bank of Pakistan (SBP).

This is its weakest closing level since May 11 and also precariously near the all-time historic low against the US dollar in the inter-bank market.

During the previous week, the rupee saw a substantial depreciation of 2.5%, closing at 295.78 against the US dollar.

However, its fall meant the gap with open-market rates narrowed, which was earlier under scrutiny as the International Monetary Fund (IMF) has prescribed a 1.25% difference in its country report after the Stand-By Arrangement.

In the coming days, the rupee is expected to remain under pressure as foreign exchange inflows seem to have dried up.

Experts cited the rupee’s decline to an increase in import payments amid SBP’s decision to lift curbs on imports.

“Import payments have risen, while there has been some outflow in the form of dividends and repatriation to foreign companies,” Abdullah Umer, a market analyst, told Business Recorder.

The expert said the market also awaits a second wave of inflation amid a hike in energy prices.

“Rupee is expected to remain under pressure and is likely to cross the 300 level,” he added.

Globally, the US dollar began on a firm footing on Monday, following five straight weeks of gains, as investors looked ahead to Federal Reserve’s Jackson Hole symposium for a guide on where rates might settle when the dust of this hiking cycle clears.

The dollar made a gain of 0.7% on the euro last week, inched ahead on the yen and surged by more than 1% on the Antipodean currencies as US Treasury yields leapt in anticipation of interest rates staying higher for longer.

Oil prices, a key indicator of currency parity, rose on Monday as global supply is tightening with lower exports from Saudi Arabia and Russia, offsetting nagging concerns about global demand growth amid high-interest rates.

Inter-bank market rates for dollar on Monday

BID                            Rs 297.00

OFFER                      Rs 297.20

Open-market movement

In the open market, the PKR lost 2.00 rupees for both buying and selling against USD, closing at 301.00 and 304.00, respectively.

Against Euro, the PKR lost 4.00 rupees for both buying and selling, closing at 329.00 and 332.00, respectively.

Against UAE Dirham, the PKR lost 50 paisa for both buying and selling, closing at 83.20 and 84.00, respectively.

Against Saudi Riyal, the PKR lost 1.70 rupees for buying and 1.00 rupee for selling, closing at 80.70 and 81.50, respectively.

Open-market rates for dollar on Monday

BID                            Rs 301.00

OFFER                      Rs 304.00