Pakistan’s rupee weakened further against the US dollar on Friday, as the currency depreciated 0.33% to close above the 175 level in the inter-bank market.
As per the State Bank of Pakistan (SBP), the PKR closed at 175.24 against the USD after a day-on-day depreciation of Rs0.57 or 0.33%. The fall comes after the rupee depreciated 0.52% or Rs0.91 against the dollar on Thursday, after three days of successive gain.
Last week on Friday, the PKR had depreciated to its lowest level of 175.73 against the USD in the inter-bank market.
“Supply and demand factors are playing in the minds of market participants, who are keenly awaiting the central bank’s monetary policy announcement,” Saad Khan, Head of Equities at IGI Securities told Business Recorder, ahead of Friday's key interest-rate announcement.
Appreciation run ends: Pakistan's rupee falls against US dollar
The SBP hiked the rate by 150 basis points, taking it to 8.75% when it eventually made the announcement on Friday.
Monetary policy: SBP raises key interest rate by 150 basis points, takes it to 8.75%
The Monetary Policy Committee meeting, which was originally scheduled for November 26, was preponed "in light of recent unforeseen developments that have affected the outlook for inflation and the balance of payments, and to help reduce the uncertainty about monetary settings prevailing in the market", said the SBP.
Earlier, the central bank also took strict notice of the volatile exchange rate and warned banks to refrain from speculations and undue practices in the currency market or face stern action.
Banks warned against exchange rate speculations
Sources told Business Recorder that SBP conducted a high-level meeting of heads of commercial banks on Thursday at the SBP head office to review the ongoing developments in the currency market. The meeting was chaired by SBP Governor Dr Reza Baqir.
During the meeting, the SBP warned banks to refrain from exchange rate speculations and ensure fair dollar transactions in the inter-bank market.
Inter-bank market rates for dollar on Friday
BID Rs 175.10
OFFER Rs 175.20
Open-market movement
In the open market, the PKR lost one rupee for both buying and selling against USD, closing at 176 and 177, respectively.
Against Euro, the PKR gained 1.50 rupees for both buying and selling, closing at 197 and 198.50, respectively.
Against UAE Dirham, the PKR lost 10 paisas for both buying and selling, closing at 49.30 and 49.80, respectively.
Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling as well, closing at 46.40 and 46.70, respectively.
Open-market rates for dollar on Friday
BID Rs 176
OFFER Rs 177