Third successive gain: Rupee appreciates 0.19% against US dollar
- Closes at 238.38 in inter-bank market on Tuesday
Pakistan's rupee posted a recovery for the third successive session, appreciating 0.19% against the US dollar in the inter-bank market on Tuesday as a reported drop in imports revived sentiment.
As per the State Bank of Pakistan (SBP), the rupee settled at 238.38, an appreciation of Re0.46 or 0.19% against the greenback.
Pakistan’s imports on a month-on-month (MoM) basis declined by 37.7 percent in July 2022, clocking in at $4.913 billion compared to $7.880 billion in June 2022. The drop in imports takes some pressure off the rupee that has gotten a hammering recently.
Meanwhile, the International Monetary Fund (IMF) also said that with the increase in petroleum development levy (PDL), Pakistan has completed the last prior action for the combined seventh and eighth review. However, it added that the board meeting is tentatively planned for late August once adequate financing assurances are confirmed.
In a text message sent to media on Tuesday, IMF's Resident Representative for Pakistan Esther Perez Ruiz confirmed that the last prior action has been met.
On Monday, the rupee had closed with a marginal recovery of Re0.53 or 0.22% higher at Rs238.84 as pressure due to heavy import payments seemed to have subsided. Meanwhile, economic and political clarity also bolstered the local currency.
“The decline in imports reflects a slowdown in the economy and an increase in hydel generation due to the recent rains will result in a further drop of energy shipments, reducing pressure on the rupee going forward,” said Trust Securities and Brokerage Limited (TSBL) in a note on Tuesday.
“In addition to this, revival of the IMF programme is likely to further lift sentiment,” it added.
Furthermore, oil prices, a key determinant of currency parity, dropped again on Tuesday as investors absorbed a bleak outlook for fuel demand with data pointing to a global manufacturing downturn just as major crude producers meet this week to determine whether to increase supply.
Brent crude futures fell 77 cents, or 0.8%, to $99.26 a barrel, while WTI crude futures eased 67 cents, or 0.7%, to $93.22 a barrel.
The drop in oil prices come “largely due to weak US economic data, recessionary concerns, and a slowdown in demand, which bodes well for Pakistan economy”, said TSBL.
Inter-bank market rates for dollar on Tuesday
BID Rs 239
OFFER Rs 241
Open-market movement
In the open market, the PKR gained 1.50 rupees for both buying and selling against USD, closing at 238.50 and 240.50, respectively.
Against Euro, the PKR gained one rupee for buying and 1.20 rupees for selling, closing at 244 and 245.80 respectively.
Against UAE Dirham, the PKR gained 50 paisas for both buying and selling, closing at 65 and 65.50, respectively.
Against Saudi Riyal, the PKR gained 80 paisas for both buying and selling, closing at 63 and 63.50, respectively.
Open-market rates for dollar on Tuesday
BID Rs 238.50
OFFER Rs 240.50
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