The great fall continues: rupee settles at new all-time low of 276.58 against US dollar

The Pakistani rupee slipped to another all-time low against the US dollar on Friday, closing over the 276 mark in the inter-bank market.

As per the State Bank of Pakistan (SBP), the currency settled at 276.58, a decline of Rs5.22 or 1.89% against the US dollar. The currency has depreciated by 25.93% during the ongoing fiscal year against the greenback.

Friday’s closing is the weakest level for the rupee, and comes as talks between the IMF and Pakistan continued in Islamabad.

Talking to Business Recorder, Saad Khan, Head of Research at IGI Securities, said the plunge comes on account of negative sentiment pertaining to talks with the IMF.

“PM Shehbaz said the IMF is giving Pakistan a tough time, which has dented market sentiment. Moreover, our forex reserves continue to deplete at a quick rate, which is also taking its toll,” he said.

“Market expects inflation to climb above 30% in recent months. The commitments made by the Finance Minister and SBP Governor on inflows are yet to be materialised, creating a perception that the authorities cannot do much to curb the ongoing deterioration,” he added.

Prime Minister Shehbaz Sharif on Friday said the IMF was giving Pakistan a hard time over unlocking a $1-billion loan at a time when the country’s economic situation is “unimaginable”.

On Thursday, Pakistan’s rupee had remained under pressure, as it had settled at 271.36, a decline of Rs2.53 or 0.93% against the US dollar.

Meanwhile, foreign exchange reserves held by the State Bank of Pakistan (SBP) dropped a massive $592 million to a mere $3.09 billion, data released on Thursday showed. This is the lowest level of central bank reserves since February 2014.

In another key development, Finance Minister Ishaq Dar on Thursday approved a proposal presented by Moulana Basheer Farooqi, Chairman of SWIT, to raise an interest-free $2 billion from overseas Pakistanis to alleviate the ongoing foreign exchange crisis.

Internationally, the euro and sterling slipped against the dollar on Friday as markets took a dovish cue from policymakers at the European Central Bank and the Bank of England, who said inflationary pressures in their economies have become more manageable.

Elsewhere, the greenback broadly advanced on the back of its Atlantic counterparts’ decline, reversing its losses earlier in the week. Against a basket of currencies, the US dollar index rose 0.03% to 101.82, away from Wednesday’s nine-month low of 100.80.

Oil prices, a key indicator of currency parity, made modest gains in early trade on Friday but were heading for a second straight week of losses, as the market looked for more signs of a strong recovery in fuel demand in China to offset looming slumps in other major economies.

Inter-bank market rates for dollar on Friday

BID Rs 277

OFFER Rs 279

Open-market movement

In the open market, the PKR lost 6.50 rupees for buying and 7.50 rupees for selling against USD, closing at 280 and 283, respectively.

Against Euro, the PKR remained unchanged for both buying and selling, closing at 294 and 296.50 respectively.

Against UAE Dirham, the PKR lost 1.30 rupees for buying and 1.40 rupees for selling, closing at 75.50 and 76.20, respectively.

Against Saudi Riyal, the PKR lost 1.80 rupees for buying and 2 rupees for selling, closing at 73.30 and 74, respectively.

Open-market rates for dollar on Friday

BID Rs 280

OFFER Rs 283