The ongoing downward momentum pushed the Pakistani rupee to a new record low against the US dollar, as it depreciated 0.21% in the inter-bank market on Wednesday.
At close, the rupee settled at 299.64, a decrease of Re0.63, as per the State Bank of Pakistan (SBP).
On Tuesday, the rupee fell to then record low against the US dollar, as it settled at 299.01.
In a key development, senior officials at the Ministry of Economic Affairs informed Business Recorder that the staff level agreement on the Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) provided a comfort level to multilaterals/bilaterals and resultantly inflows improved during the first month of current fiscal year 2023-24.
However, the currency has come renewed pressure after the central bank decided to ease import restrictions, said experts.
“It’s mainly due to payment pressure as import restrictions have eased, while the current account number for July-2023 is also concerning,” Abdullah Farhan, Head of Research at IGI Securities, told Business Recorder.
Globally, the US dollar perched near a two-month peak on Wednesday as investors looked to the Federal Reserve chair’s speech this week for cues on the path of monetary policy, while the yen loitered near 146 a dollar, keeping traders guessing on any intervention.
The dollar index, which measures the US currency against six rivals, was at 103.55, not far from the two-month high of 103.71 it touched on Tuesday.
The index is up 1.6% in August and is on course to snap its two-month losing streak.
Markets are pricing in an 86% chance of the Fed standing pat at its policy meeting next month, the CME FedWatch tool showed, but the odds of the US central bank hiking interest rates one more time this year toward the end of the year have been rising.
Oil prices, a key indicator of currency parity, dropped on Wednesday, as traders were cautious ahead of potentially gloomy manufacturing data and an annual meeting at Jackson Hole, where heavy-hitter central bankers including from the United States will talk interest rates.
Inter-bank market rates for dollar on Wednesday
BID Rs 299.50
OFFER Rs 299.70
Open-market movement
In the open market, the PKR lost 6.00 rupees for both buying and selling against USD, closing at 309.00 and 312.00, respectively.
Against Euro, the PKR lost 2.00 rupees for buying and 1.00 rupee for selling, closing at 337.00 and 340.00, respectively.
Against UAE Dirham, the PKR lost 1.30 rupee for both buying and selling, closing at 85.50 and 86.30, respectively.
Against Saudi Riyal, the PKR lost 50 paisa for both buying and selling, closing at 83.00 and 83.80, respectively.
Open-market rates for dollar on Wednesday
BID Rs 309.00
OFFER Rs 312.00