Rupee under duress, settles at 224.65 against US dollar

Pakistan’s rupee remained under pressure against the US dollar, as the currency registered a loss for the sixth consecutive session, depreciating 0.11% in the inter-bank market on Monday.

As per the State Bank of Pakistan (SBP), the rupee closed at 224.65 after a decrease of Re0.25. The rupee has depreciated by 21.45% against the US dollar in the ongoing calendar year.

Rupee depreciation continues, settles at 224.4 against US dollar

During the previous week, the rupee had registered minor depreciation across all five sessions to end with a cumulative fall of 0.32% against the US dollar in the inter-bank market.

Worries have grown over a simultaneous prevalence of a so-called ‘black’ or ‘informal’ market, which has seen trades at over Rs240 to the US dollar.

In the absence of effective administrative mechanisms, those seeking the US dollar have been forced to cough up higher ‘premiums’ to rates prevailing in the inter-bank market as Pakistan faces shortage of foreign currency reserves.

At the same time, pressure on the economy has increased as SBP-held foreign exchange reserves have decreased by $784 million to $6.715 billion, showed latest data released on Thursday.

Globally, the dollar firmed on Monday after data showed producer prices in the US rose more than expected last month, pointing to persistent inflationary pressures and stoking fears the Federal Reserve would need to keep rates higher for longer.

The Fed once again takes centre stage, and is widely expected to raise rates by 50 basis points, though focus would be on the central bank’s updated economic projections and Fed Chair Jerome Powell’s press conference.

Against a basket of currencies, the US dollar index eked out a 0.04% gain at 105.09.

Oil prices, a key indicator of currency parity, fell on Monday, deepening a multi-week decline, as a weakening global economy offset supply woes stemming from the closure of a key pipeline supplying the United States and Russian threats of a production cut.

Inter-bank market rates for dollar on Monday

BID Rs 224.75

OFFER Rs 225.75

Open-market movement

In the open market, the PKR lost 1.80 rupees for buying and 2 rupees for selling against USD, closing at 231.50 and 234, respectively.

Against Euro, the PKR lost 50 paisas for both buying and selling, closing at 251.50 and 253.50 respectively.

Against UAE Dirham, the PKR lost 50 paisas for both buying and selling, closing at 66.30 and 66.80, respectively.

Against Saudi Riyal, the PKR lost 30 paisas for both buying and selling, closing at 63.70 and 64.20, respectively.

Open-market rates for dollar on Monday

BID Rs 231.50

OFFER Rs 234