3rd successive decline: rupee closes at 282.85 against US dollar

The Pakistani rupee remained under pressure against the US dollar for the third consecutive session, depreciating 0.2% in the inter-bank market on Wednesday.

As per the State Bank of Pakistan (SBP), the rupee settled at 282.85, a decline of Re0.56.

A day earlier, the rupee registered a loss as well against the US dollar, settling at 282.29 in the inter-bank market on Tuesday, a decline of Re0.68 or 0.24%.

Meanwhile, the market continued to wait in anticipation of a staff-level agreement with the International Monetary Fund (IMF). Prime Minister Shehbaz Sharif on Tuesday said an agreement would be reached within a few days as the government has accepted even the “toughest” conditions put by the global financial institution.

In an interview with a private television channel, he said joint efforts were being made by both his economic team and other national institutions to make the process a success.

On the international front, the US dollar found support in Asia on Wednesday as investors dialled back expectations of US rate cuts as fear of a banking crisis ebbed and another stubbornly high inflation print landed.

In early trade, the dollar selling of the past two sessions had abated and the greenback rose about 0.2% on both the euro and yen.

Interest rate futures pricing now implies an 80% chance of a 25 basis point US rate hike next week.

That is a lot more dovish than a week ago when markets priced a similar chance of a 50 bp hike, but it is also a lot more hawkish than a day ago when crisis fears had traders pricing a 50% chance of a hold and steep cuts later in the year.

Oil prices, a key indicator of currency parity, rebounded more than 1% on Wednesday, recovering from the previous day’s fall, after OPEC’s upwards revision for Chinese consumption offset bearish global investor sentiment trigged by US bank failures.

Inter-bank market rates for dollar on Wednesday

BID Rs 282.80

OFFER Rs 284.80

Open-market movement

In the open market, the PKR lost 1.50 rupee for both buying and selling against USD, closing at 282.50 and 285.50, respectively.

Against Euro, the PKR lost 2 rupees for both buying and selling, closing at 300 and 303 respectively.

Against UAE Dirham, the PKR lost 20 paisa for both buying and selling, closing at 77.00 and 77.70, respectively.

Against Saudi Riyal, the PKR lost 50 paisa for both buying and selling, closing at 74.80 and 75.50, respectively.

Open-market rates for dollar on Wednesday

BID Rs 282.50

OFFER Rs 285.50