Rupee registers marginal gain after back-to-back losses against US dollar

After back-to-back losses, Pakistan's rupee reversed the trend against the US dollar, as it recorded a slight gain of 0.01% in the inter-bank market on Thursday.

As per the State Bank of Pakistan (SBP), the rupee closed at 174.87 after a day-on-day appreciation of 2 paisas or 0.01%. On Wednesday, the currency dipped 0.22% to close at 174.89.

On Friday last week, the rupee had gained over Re1 or 0.60% to settle at its highest level since November 23 against the greenback. The rupee had been on a gaining spree amid International Monetary Fund (IMF) approval for its sixth review of the Extended Fund Facility (EFF).

Rupee takes a hit, falls 0.22% against US dollar

“The improvement in market sentiment comes on account of IMF approval,” Zafar Paracha, General Secretary at Exchange Companies Association of Pakistan (ECAP), told Business Recorder.

He said that the funding amount may not be much, “however, the good sign is that other international lenders would be comfortable in giving loans to Pakistan now".

The currency dealer said that macroeconomic indicators are also moving in the right direction including growth in remittance and exports. “However, imports have also risen, but that is mostly on account of hike in international commodity prices and increase in freight charges,” added Paracha.

He said that the rupee is expected to drop to 172 in the coming days, as it remains undervalued against the US dollar.

Meanwhile, oil prices, a key determinant of rupee fluctuation, rose on Thursday after rallying on an unexpected drop in US crude inventories in the previous session. Brent crude futures rose 34 cents, or 0.4%, to $91.89 a barrel, while US West Texas Intermediate crude was at $90.17 a barrel, up 51 cents, or 0.6%.

Inter-bank market rates for dollar on Thursday

BID Rs 174.70

OFFER Rs 174.80

Open-market movement

In the open market, the PKR lost 50 paisas for both buying and selling against USD, closing at 176.30 and 177.30, respectively.

Against Euro, the PKR lost 90 paisas for buying and one rupee for selling, closing at 200 and 202, respectively.

Against UAE Dirham, the PKR lost 39 paisas for buying and 40 paisas for selling, closing at 49.01 and 49.50, respectively.

Against Saudi Riyal, the PKR lost 30 paisas for both buying and selling, closing at 46.65 and 47.10, respectively.

Open-market rates for dollar on Thursday

BID Rs 176.30

OFFER Rs 177.30