Pakistan's rupee continued to sustain losses against the US dollar for the fifth successive session, settling with a depreciation of 0.89% on Thursday.
As per the State Bank of Pakistan (SBP), the rupee closed at 225.42 after declining by Rs2 against the greenback. During the five trading sessions, the rupee has cumulatively declined by Rs6.82 or 3% against the US dollar.
On Wednesday, the rupee had registered a loss for the fourth successive session to close at 223.42 after declining by Rs2 or 0.9% against the greenback.
The decline has been attributed to a number of factors including a strengthening dollar in the international market. Additionally, a surge in demand for the foreign currency in the local market, led by pressure from import payments, has added to rupee's weakness.
Umair Naseer, Head of Research at Topline Securities, highlighted that the dollar is strengthening against other currencies as well.
“There is also some import pressure, as the country is importing edible items in the wake of floods. This is also having an impact as speculation has increased in the market,” Naseer told Business Recorder.
The analyst said pressure on rupee would ease if oil prices drop below $80 per barrel.
“Moreover, after the International Monetary Fund (IMF) funding, flows from other creditors are also in the offing which will improve the liquidity position and reduce pressure on the rupee,” he said.
Globally, the dollar continued to gain strength and hovered near a two-decade high hit in the previous session as investors looked for fresh insight on the global monetary tightening path from a European Central Bank rate decision and comments from the head of the Federal Reserve.
The US dollar index, which measures the greenback against six major peers, edged up 0.04% to 109.73, after a peak of 110.79 on Wednesday, a level not seen since June 2002.
Meanwhile, oil prices, a key determinant of currency parity, rose nearly $1 per barrel on Thursday after dropping through key technical support levels in the previous session. An energy standoff between European nations and Russia focused investors minds on how tight fuel supply may become.
Inter-bank market rates for dollar on Thursday
BID Rs 225.50
OFFER Rs 226.50
Open-market movement
In the open market, the PKR gained one rupee for both buying and selling against USD, closing at 231 and 233, respectively.
Against Euro, the PKR gained 2 rupees for both buying and selling, closing at 229 and 231 respectively.
Against UAE Dirham, the PKR gained 1.50 rupees for buying and 1.40 rupees for selling, closing at 62.70 and 63.30, respectively.
Against Saudi Riyal, the PKR gained 50 paisas for both buying and selling, closing at 61.20 and 61.70, respectively.
Open-market rates for dollar on Thursday
BID Rs 231
OFFER Rs 233