Pakistan's rupee remained on the receiving end on Friday, depreciating 0.5% against the US dollar in the inter-bank market as pressure persisted on the currency amid lack of clarity on inflows and economic support from international lenders and friendly countries.
As per the State Bank of Pakistan (SBP), the rupee closed at 186.63 after a day-on-day decline of 94 paisas or 0.50%. Last Saturday, the rupee had closed at 185.69 after a decline of 0.03%.
Rupee registers marginal fall against US dollar
The rupee had remained largely stable prior to the fall, as the market considered Pakistan’s macroeconomic indicators and ongoing talks with the International Monetary Fund (IMF) as giving some level of clarity going forward. However, since then, there has been little to no progress on those fronts.
Oil prices, a key determinant of currency parity, climbed for a third straight session on Friday, shrugging off concerns about global economic growth as worries about tightening supplies underpinned prices ahead of an impending European Union embargo on Russian oil.
Taking to Twitter, Asad Rizvi, Ex-Country Treasurer of Chase Manhattan Bank, stated that the rupee could come under pressure as Nostro accounts will need funding. “More importantly, remittances will dry out for about a week or so,” he said, adding that managing cash flows will be a challenging task due to the weekend.
Meanwhile, in a major development during the Eid holidays, Dr Murtaza Syed assumed the charge of acting governor SBP, with effect from May 5, 2022, after Dr Reza Baqir's term ended ended on May 4, 2022.
Syed was appointed as Deputy Governor of SBP by the Federal Government on January 27, 2020, for a period of three years. By virtue of being the senior-most deputy governor, Syed was elevated to the role of central bank chief.
The change in SBP leadership comes as Islamabad remains engaged in talks with the IMF over the stalled $6 billion Extended Fund Facility (EFF). The resumption of the programme is crucial for Pakistan currently battling a widening current account deficit, putting pressure on the rupee.
Inter-bank market rates for dollar on Friday
BID Rs 186.50
OFFER Rs 186.70
Open-market movement
In the open market, the PKR lost 50 paisas for buying while remaining unchanged for selling against USD, closing at 186.50 and 187, respectively.
Against Euro, the PKR gained one rupee for both buying and selling, closing at 195 and 197, respectively.
Against UAE Dirham, the PKR gained 10 paisas for both buying and selling, closing at 50.40 and 50.80, respectively.
Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling, closing at 49.10 and 49.40, respectively.
Open-market rates for dollar on Friday
BID Rs 186.50
OFFER Rs 187