The Pakistani rupee remained under pressure against the US dollar, depreciating 0.44% in the inter-bank market on Monday.
As per the State Bank of Pakistan (SBP), the rupee settled at 285.04, a loss of Rs1.25.
During the previous week, the rupee had depreciated a marginal 0.21% to settle at 283.79 as a slightly higher level of foreign exchange reserves kept the downside pressure at bay even without a revival of the International Monetary Fund (IMF) programme.
However, reserves held by the SBP remain at less than one month of import cover, underscoring the need for resumption of the programme.
Experts believe the currency will likely remain under pressure, especially since a cut in oil production could boost the commodity’s prices, impacting the current account of countries like Pakistan.
Globally, the US dollar started the week higher as fears over inflation resurfaced after a surprise announcement by major oil producers to cut production further, with traders wagering the Federal Reserve may need to increase interest rates at its next meeting.
The dollar index, which measures the US dollar against six peers, was last at 102.77, aiming to break through 103 for the first time in a week.
Oil prices, a key indicator of currency parity, surged on Monday, jolted by a surprise announcement by OPEC+ to cut production further in what top producer Saudi Arabia called a precautionary measure to support market stability.
Saudi, UAE lead Mideast oil production cut for market ‘stability’
The OPEC and their allies including Russia shook markets by announcing production cuts of about 1.16 million barrels per day on Sunday.
Inter-bank market rates for dollar on Monday
BID Rs 285
OFFER Rs 287
Open-market movement
In the open market, the PKR lost 50 paisa for both buying and selling against USD, closing at 284.50 and 287.50, respectively.
Against Euro, the PKR gained 1 rupee for both buying and selling, closing at 307 and 310 respectively.
Against UAE Dirham, the PKR lost 10 paisa for both buying and selling, closing at 77.20 and 77.90, respectively.
Against Saudi Riyal, the PKR gained 10 paisa for buying and lost 5 paisa for selling, closing at 75.60 and 76.35, respectively.
Open-market rates for dollar on Monday
BID Rs 284.50
OFFER Rs 287.50