Rupee closes near 227 as relentless fall continues

Pakistani rupee's fall continued on Thursday as the currency depreciated to close near the 227 level against the US dollar in the inter-bank market amid renewed concerns over inflation and cost of doing business.

As per the State Bank of Pakistan (SBP), the rupee settled at 226.81, a fall of Rs1.89 or 0.83%, against the greenback, a new low for the currency that has been under immense pressure this week.

Rupee continues to plummet, closes near 225 against US dollar

This was also the fifth successive decline for the rupee, which has lost nearly 7.5% of its value since Thursday last week.

On Wednesday, Federal Minister for Finance and Revenue Miftah Ismail blamed the country’s ongoing political turmoil for the rapid depreciation of the national currency. Miftah argued that there is no pressure on the rupee from the trade balance side, and the rupee's fall could only be attributed to political turmoil.

The SBP, however, moved to express concern over the recent economic developments, terming the ongoing fiscal year 2022-23 as the most challenging for the country’s economy and even worse compared to the challenge of the Covid-19 pandemic because of global commodity prices and the geopolitical situation.

A SBP official also told Business Recorder that as far as the exchange rate is concerned, the last two to three days have been about sentiments because no one was sure as to what would happen to the IMF programme following the political development.

The official said the perception that the central bank is not watching the situation and everything was being left to the market forces was not accurate as it has been intervening where necessary in terms of the exchange rate.

"We are trying to manage inflation," said the SBP official.

Meanwhile, market analysts remained concerned over the situation, and its impact on the overall economy.

“Negativity is in the air,” said an analyst on the condition of anonymity. “Banks are opening Letter of Credit (LCs) at higher rates to safeguard their risk exposure. This is causing further panic. Political noise is also hurting investor confidence.

“If early elections are held, there would be no policy stability, which may dent the crucial International Monetary Fund (IMF) programme."

Inter-bank market rates for dollar on Thursday

BID Rs 228

OFFER Rs 229

Open-market movement

In the open market, the PKR lost 3 rupees for both buying and selling against USD, closing at 226 and 228, respectively.

Against Euro, the PKR lost one rupee for both buying and selling, closing at 227 and 229 respectively.

Against UAE Dirham, the PKR lost 20 paisas for both buying and selling, closing at 60.50 and 61, respectively.

Against Saudi Riyal, the PKR lost 40 paisas for buying and 50 paisas for selling, closing at 58.70 and 59.30, respectively.

Open-market rates for dollar on Thursday

BID Rs 226

OFFER Rs 228