KARACHI: A disastrous week for the rupee saw it lose 3.1 percent against the US dollar in the inter-bank market, with Pakistan’s currency hitting new record lows to end at 192.53 on Friday, its weakest closing in history.
The market has been in panic and speculation modes over uncertainty around the International Monetary Fund (IMF) programme.
Together with the USD strength and likelihood of pressure on Pakistan’s balance of payments, the rupee lost value in all 5 sessions, as worry increased over the state of the economy, falling foreign exchange reserves, and a widening trade deficit.
Robust remittances data seemed to have arrested the slide intra-day on Friday, but pressure is likely to continue as Pakistan shows its willingness to the IMF over the Extended Fund Facility (EFF) in Doha talks that begin on May 18.
Riding into oblivion: Rupee closes at new historic low in inter-bank market
On Sunday, the government also decided against increasing fuel prices, a development unlikely to sit well with IMF authorities.
However, Finance Minister Miftah Ismail said he would try to convince the lender of Pakistan’s commitment to the programme, which Islamabad has requested be increased in size.
Meanwhile, the market expects the currency to remain volatile. Additionally, spread between inter-bank and open-market rates also increased during the week with the rupee even hitting 195 in the open.
Open-market movement
In the open market, the PKR lost6.90 rupees for buying and 7.70 rupees for selling against USD, closing at 193.40 and 194.70, respectively.
Against Euro, the PKR lost 7 rupees for both buying and selling, closing at 202 and 204, respectively.
Against UAE Dirham, the PKR lost 2.20 rupees for both buying and selling, closing at 52.60 and 53, respectively.
Against Saudi Riyal, the PKR lost 2.10 rupees for buying and 2.30 rupees for selling closing, at 51.20 and 51.70, respectively.
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THE RUPEE
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Weekly Interbank market rates for dollar
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Bid Close Rs. 192.40
Offer Close Rs. 192.60
Bid Open Rs. 186.50
Offer Open Rs. 186.70
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Weekly Open market rates for dollar
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Bid Close Rs. 193.40
Offer Close Rs. 194.70
Bid Open Rs. 186.50
Offer Open Rs. 187.00
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Copyright Business Recorder, 2022