Rupee's 10-session depreciation run finally hatled, as the local currency registered a marginal gain against the US dollar in the inter-bank on Friday. The rupee, however, remained at the 239 level.
As per the State Bank of Pakistan (SBP), the rupee closed at 239.37, a day-on-day gain of Rs0.57 or 0.24%, against the greenback.
On Thursday, the rupee had closed at 239.94, a day-on-day fall of Rs3.92 or 1.63%, amid pressure due to import payments and the government's reported inability to intervene.
Rising political and economic stress has kept the rupee on the receiving end against the US dollar. Despite Friday's gain, the local currency has depreciated over 13% in the last 11 trading sessions.
“Political tension again flared up after the change of political setup in Punjab, deepening uncertainty and affecting the overall economic scenario of the country,” said Trust Securities and Brokerage Limited in a note on Friday.
On Thursday, S&P Global Ratings (previously Standard and Poor’s) revised the outlook on Pakistan’s long-term ratings to negative from stable to reflect the country’s weakening external metrics against a backdrop of higher commodity prices, tighter global financial conditions, and a weakening rupee.
“This would consequently hurt equity and forex markets, impacting the rupee already facing a free-fall scenario, deteriorating market confidence," added Trust Securities and Brokerage Limited.
Furthermore, State Bank of Pakistan's foreign exchange reserves dropped by $754 million to $8.575 billion, adding further concerns over the country's balance-of-payments' position.
Meanwhile, economic experts also expressed concern over the currency's free-fall, urging authorities to take measures to arrest the decline.
“Being an import-based country, the rise in dollar rate adds to our difficulties, whereas the country’s external debt also increases,” said Zafar Paracha, General Secretary of Exchange Companies Association of Pakistan (ECAP), in a video message.
“Furthermore, our expenses are more than our income. However, the government seems unwilling to cut down its expenses, adding pressure on the national exchequer,” he said.
Paracha informed that the USD is being sold at Rs250 level in the “black market”, while authorities have adopted a lax attitude in this regard.
Inter-bank market rates for dollar on Friday
BID Rs 240
OFFER Rs 242
Open-market movement
In the open market, the PKR lost 4 rupees for both buying and selling against USD, closing at 246 and 248, respectively.
Against Euro, the PKR lost 7 rupees for buying and 7.50 rupees for selling, closing at 250 and 252.50 respectively.
Against UAE Dirham, the PKR lost 1.20 rupees for both buying and selling, closing at 66.80 and 67.30, respectively.
Against Saudi Riyal, the PKR lost 70 paisas for buying and 80 paisas for selling, closing at 64.70 and 65.30, respectively.
Open-market rates for dollar on Friday
BID Rs 246
OFFER Rs 248