Pakistan’s rupee ended with a loss for the sixth successive session against the US dollar, falling 0.15% in the inter-bank market on Tuesday.
As per the State Bank of Pakistan (SBP), the rupee closed at 226.15 after a fall of Re0.33 against the greenback. The rupee has depreciated over 22% against the US dollar during the ongoing calendar year.
PKR again manages to show stability
On Monday, the rupee depreciated against the US dollar, to settle at 225.82 after a decline of Re0.18 or 0.08%.
Market experts and currency dealers have expressed concern over the rise in smuggling of US dollars to neighbouring countries, which is also driving the informal/grey market.
On Monday, Malik Muhammad Bostan, president of the Forex Association of Pakistan, claimed that the country was hemorrhaging dollars owing to smuggling and its trade with Afghanistan.
“We are losing close to $2 billion to Afghanistan on a monthly basis. The government must ban trading in dollars with the neighbour. It should be done in local currency or barter trade,” said Bostan.
“Pakistan imports coal from Afghanistan, but the payments are being made in dollars,” he claimed.
Bostan said Pakistan’s domestic market is full of buyers with not nearly enough foreign currency to meet demand.
“A very small number of people are currently selling their dollars in the open market. These are people unaware of the black market. Otherwise they, too, would go that way, I feel.”
Globally, the dollar moved broadly lower on Tuesday while Australia and New Zealand’s currencies jumped as risk appetite grew after China said it will scrap its COVID quarantine rule for inbound travellers - a major step towards easing curbs on its borders.
Data released on Friday showed that US consumer spending barely rose in November, while inflation cooled further, reinforcing expectations that the Federal Reserve could scale back on its aggressive monetary policy tightening path.
Against a basket of currencies, the US dollar index steadied at 104.12.
Oil prices, a key indicator of currency parity, hit a three-week high on Tuesday as China’s latest easing of COVID-19 restrictions spurred hopes of a fuel demand recovery, with further support coming from cuts to US energy production caused by winter storms.
Inter-bank market rates for dollar on Tuesday
BID Rs 226.10
OFFER Rs 227.10
Open-market movement
In the open market, the PKR lost 45 paisas for buying and 50 paisas for selling against USD, closing at 232.70 and 235, respectively.
Against Euro, the PKR lost 50 paisas for both buying and selling, closing at 261 and 263 respectively.
Against UAE Dirham, the PKR gained 50 paisas for both buying and selling, closing at 68.50 and 69, respectively.
Against Saudi Riyal, the PKR gained 20 paisas for both buying and selling, closing at 65.30 and 65.80, respectively.
Open-market rates for dollar on Tuesday
BID Rs 232.70
OFFER Rs 235