KARACHI: The rupee depreciated6.63% against the US dollar during the previous week, settling at 278.46 in the inter-bank market after a massive fall on Thursday saw the currency hit yet another record low before a partial recovery the next day.
A marginal gain on Monday was followed by losses the subsequent two days before a massive 6.7% plunge on Thursday saw the dollar reach Rs285.09 in value. Reports that suggested the International Monetary Fund (IMF) programme was still not on track made the markets jittery. Additionally, heavy import payments and a widening gap between the open and inter-bank markets again suggested artificial control on part of the authorities.
On Friday, however, the markets enjoyed a sense of some calm, as the rupee recovered 2.38%, going below the 280 level after the State Bank of Pakistan’s (SBP) decision to raise the key policy rate by 300 basis points to take it to 20%. The central bank’s decision, which many saw as yet another prior condition of the IMF, was then hailed as taking Pakistan closer to revival of the programme.
Later, Finance Minister Ishaq Dar also moved to calm market’s nerves, holding a press conference to announce that the Industrial and Commercial Bank of China (ICBC) has rolled over a $1.3-billion facility for Pakistan, which would see the country receive the amount in three tranches. On Friday night, Dar confirmed that the SBP received $500 million, the first of the three disbursements under the ICBC facility.
The SBP had on Thursday also reported an increase in its foreign exchange reserves, as it received an inflow of $700 million from the China Development Bank, which was another loan to boost the country’s depleting foreign currency reserves.
Many experts believe that while the loan inflows from China will help, the IMF programme still remains critical to helping the rupee see some level of stability.
Open-market rates
In the open market, the PKR lost 14.50 rupees for both buying and selling against USD, closing at 279.50 and 282.50, respectively.
Against Euro, the PKR lost 13 rupees for both buying and selling, closing at 290.00 and 293.00, respectively.
Against UAE Dirham, the PKR lost 2 rupees for both buying and selling, closing at 76.50 and 77.20, respectively.
Against Saudi Riyal, the PKR lost 4.20 rupees for buying and 4.30 rupees for selling, closing at 74.20 and 75.00, respectively.
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THE RUPEE
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Weekly inter-bank market rates for dollar
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Bid Close Rs. 278.50
Offer Close Rs. 281.50
Bid Open Rs. 259.95
Offer Open Rs. 261.95
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Weekly open-market rates for dollar
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Bid Close Rs. 279.50
Offer Close Rs. 282.50
Bid Open Rs. 265.00
Offer Open Rs. 268.00
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Copyright Business Recorder, 2023
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