Pakistan rupee's six-day appreciation run ended as the currency closed over 170 against the US dollar in the inter-bank market on Thursday.
As per the State Bank of Pakistan (SBP), the PKR settled at 170.01 against the USD after a day-on-day depreciation of Rs0.04 or 0.02%. The PKR closed below the 170 level for the first time in over a month in the inter-bank market on Wednesday.
On October 26, the PKR had dropped to its lowest level, closing over the 175 level for the first time.
However, since then, the rupee has gained 3.1% on the back of Saudi Arabia's support package, and some level of clarity regarding the International Monetary Fund (IMF) $1-billion Extended Funded Facility (EFF) programme.
Rupee continues to strengthen, closes at over one-month high
Last week, Saudi Arabia announced a $4.2-billion support package for Pakistan. The Saudi Fund for Development (SFD) announced the issuance of the Royal Directive to deposit an amount worth of $3 billion into the central bank of Pakistan. Additionally, the SFD said that the royal directive was also issued to finance the oil derivatives trade with a total amount of $1.2 billion throughout the year.
However, despite the gain, the rupee has still lost significant ground against the dollar, which is being blamed for rising inflation.
During a meeting of the Senate Standing Committee on Finance on Wednesday, Deputy Governor SBP Murtaza acknowledged that the movement in exchange rate affects inflation.
However, he said that the recent depreciation did not have much impact because this inflation in Pakistan was being stoked by rising food and energy prices in the global market.
Inter-bank market rates for dollar on Thursday
BID Rs 170
OFFER Rs 170.10
Open-market movement
In the open market, the PKR lost 30 paisas for both buying and selling against the USD, closing at 170.50 and 171.50, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 195 and 196.90, respectively.
Against UAE Dirham, the PKR remained unchanged for both buying and selling, closing at 47.70 and 48.15, respectively.
Against Saudi Riyal, the PKR remained unchanged for both buying and selling, closing at 44.70 and 45.10 respectively.
Open-market rates for dollar on Thursday
BID Rs 170.50
OFFER Rs 171.50