New historic low: rupee closes at 287.29 against US dollar

Negative economic indicators and uncertainty over resumption of the International Monetary Fund (IMF) programme pushed the Pakistani rupee towards a new historic low against the US dollar, as the currency settled over the 287 level for the first time in the inter-bank market on Tuesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 287.29, a loss of Rs2.25 or 0.8%. This is the lowest level for the Pakistani rupee since it hit 285.02 against the greenback in March this year.

Pressure on the rupee continued from a day prior, when it closed at 285.04 in the inter-bank market against the dollar, a decline of Rs1.25 or 0.44%.

Earlier in the year, the rupee had suffered a dramatic fall when it went from 230.89 to 255.43 on January 26 as the government loosened what were seen as administrative measures to keep the currency in check.

Experts say the market awaits the resumption of the IMF Extended Fund Facility (EFF) programme, which has remained stalled since last year.

“Uncertainty pertaining to the IMF programme is causing pressure on the Pakistani rupee,” Sana Tawfik, vice-president research and a senior analyst at Arif Habib Limited (AHL), told Business Recorder.

“The country’s foreign exchange reserves have also declined, which is another source of concern for investors,” she said.

Tawfik added that the SBP’s latest move to impose fines on exporters delaying receipt of payments would prove ineffective.

Last week, the central bank asked exporters to bring delayed export proceeds to Pakistan by April 30, otherwise up to 9% of export proceeds amount will be marked as lien.

In a key development, it was learnt that Finance Minister Ishaq Dar, accompanied by a high-powered delegation, will visit the US from April 10 to 16 to attend the upcoming annual spring meetings of the IMF and the World Bank.

The delegation will hold a separate meeting with IMF officials during the visit, it was learnt.

The incumbent government has already said that it has fulfilled all requirements set by the international lender for the release of the $1.1 billion tranche.

Globally, the US dollar wobbled on Tuesday after a slump in US manufacturing activity last month pointed to further signs of a slowing economy and trumped renewed inflation concerns following OPEC+’s surprise output cut.

An Institute for Supply Management survey showed on Monday that manufacturing activity fell to the lowest level in nearly three years in March as new orders continued to contract, with all subcomponents of its manufacturing Purchasing Managers’ Index (PMI) below the 50 thresholds for the first time since 2009. (A PMI reading over 50 indicates growth of the manufacturing sector as compared to the previous month, while a reading under 50 suggests contraction.)

The US dollar index was marginally lower at 102.02, having fallen more than 0.5% on Monday.

Oil prices, a key indicator of currency parity, rose on Tuesday after OPEC+ plans to cut more production jolted markets the previous day, with investors’ attention shifting to demand trends and the impact of higher prices on the global economy.

Inter-bank market rates for dollar on Tuesday

BID Rs 287.30

OFFER Rs 289.30

Open-market movement

In the open market, the PKR lost 3.50 rupees for both buying and selling against USD, closing at 288 and 291, respectively.

Against Euro, the PKR lost 4.50 rupees for both buying and selling, closing at 311.50 and 314.50 respectively.

Against UAE Dirham, the PKR lost 1.10 rupee for both buying and selling, closing at 78.30 and 79.00, respectively.

Against Saudi Riyal, the PKR lost 90 paisa for buying and lost 85 paisa for selling, closing at 76.50 and 77.20, respectively.

Open-market rates for dollar on Tuesday

BID Rs 288

OFFER Rs 291