Rupee depreciates 0.35%, settles at 221.43 against US dollar

Pakistan’s rupee registered a depreciation of 0.35% in the inter-bank market on Wednesday, as investors awaited the US Federal Reserve's decision on the policy rate that was to be announced later in the day.

As per the State Bank of Pakistan (SBP), the rupee closed at 221.43 after a depreciation of Re0.78.

On Tuesday, Pakistan’s rupee had registered back-to-back gains against the US dollar, and settled at 220.65 after an appreciation of Re0.24 or 0.11% in the inter-bank.

The gains came after market sentiments improved following Finance Minister Ishaq Dar’s meetings with the high-ups of banks and exchange companies.

However, in a key development, Consumer Price Index (CPI) based inflation increased to 26.6% on a year-on-year basis in October 2022 as compared to an increase of 23.2% in the previous month and 9.2% in October 2021, as per latest data released by the Pakistan Bureau of Statistics (PBS) on Tuesday.

Arif Habib Limited (AHL) in its report said volatility in the PKR-USD parity has been witnessed in recent weeks amid debt obligation over the next 12 months in the backdrop of tough global conditions.

“In particular, effective negotiation with bilateral and multilateral partners, especially post floods will help stabilise the parity,” it said.

Globally, the US dollar slipped on Wednesday as investors awaited the US Federal Reserve's policy decision amid speculation it might indicate a slowdown in future rate hikes.

The dollar index - which gauges the greenback against a basket of six counterparts that includes the yen, euro and sterling - eased 0.2% to 111.28, but was not far below Tuesday's high of 111.78, the strongest level since Oct. 25.

The index has fluctuated widely around the 112 level since its retreat from a two-decade high of 114.78 at the end of September.

Oil prices, a key indicator of currency parity, rose on Wednesday after industry data showed a surprise drop in US crude stocks, suggesting demand is holding up despite steep interest rate hikes dampening global growth.

Inter-bank market rates for dollar on Wednesday

BID Rs 221.45

OFFER Rs 222.45

Open-market movement

In the open market, the PKR lost 50 paisas for both buying and selling against USD, closing at 225 and 227, respectively.

Against Euro, the PKR lost 2 rupees for both buying and selling, closing at 232 and 234 respectively.

Against UAE Dirham, the PKR gained 30 paisas for both buying and selling, closing at 64.70 and 65.20, respectively.

Against Saudi Riyal, the PKR lost 20 paisas for both buying and selling, closing at 62.50 and 63, respectively.

Open-market rates for dollar on Wednesday

BID Rs 225

OFFER Rs 227