KARACHI: The rupee depreciated 2.7% in the inter-bank against the US dollar to settle at 220.66 on Friday, but it was the currency’s movement in the open market that left followers scratching their heads.
In the open market, the currency fell almost twice as much – 5.2% – against the US dollar, with foreign exchange companies attributing the fall to demand-and-supply dynamics. However, many experts said speculation could also have been at play. The fall meant the spread between dollar rates in the two markets went to the range of Rs8-12. In the open market, the dollar closed at 228-230.
UAE dirhams also remained in high demand due to the recent development that requires some passengers from Pakistan to carry at least AED5,000 with them.
In the inter-bank market, the rupee lost value in all five sessions even as Saudi Arabia confirmed its plan to invest $1 billion in Pakistan. Additionally, the Qatar Investment Authority (QIA), one of the largest sovereign wealth funds in the world, also announced that it aims to invest about $3 billion in different sectors of Pakistan’s economy.
With the announcements, Pakistan said that it has secured the required financing to meet International Monetary Fund (IMF) conditions ahead of the lender’s board meeting on August 29.
The developments did little to stop the fall of the rupee as the market also reacted to Pakistan relaxing its import ban even though it was accompanied by higher regulatory duties. At the same time, Pakistan reported a fall in the foreign exchange reserves held by the State Bank of Pakistan, which added to the urgency with which Islamabad requires dollar-inflow.
Open-market rates
In the open market, the PKR lost12 rupees for both buying and selling against USD, closing at 228 and 230, respectively.
Against Euro, the PKR lost 10 rupees for both buying and selling, closing at 228 and 230, respectively.
Against UAE Dirham, the PKR lost 3.90 rupees for buying and 3.80 rupees for selling, closing at 63.50 and 64, respectively.
Against Saudi Riyal, the PKR lost 3.80 rupees for both buying and selling closing, at 61 and 61.50, respectively.
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THE RUPEE
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Weekly Interbank market rates for dollar
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Bid Close Rs. 220.50
Offer Close Rs. 221.50
Bid Open Rs. 215.00
Offer Open Rs. 215.50
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Weekly Open market rates for dollar
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Bid Close Rs. 228.00
Offer Close Rs. 230.00
Bid Open Rs. 216.00
Offer Open Rs. 218.00
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Copyright Business Recorder, 2022