Record low: rupee settles near 299 against US dollar

The deteriorating political situation in the country played on investors’ minds as the Pakistani rupee plunged to a fresh low of 298.93 against the US dollar in the inter-bank market on Thursday.

At close, the rupee finished a decline of Rs8.71 or 2.91%.

The massive decline comes after the rupee finished at the then-record low of 290.22 against the US dollar in the inter-bank market on Wednesday.

Pakistan has been rocked by deadly unrest sparked by Pakistan Tehreek-e-Insaaf (PTI) chief Imran Khan’s arrest on Tuesday that has aggravated instability at a time of severe economic crisis and a delay in the International Monetary Fund (IMF) bailout.

Protesters have stormed military buildings and ransacked the residence of a top army general in the eastern city of Lahore, video footage shows.

Other state buildings and assets have been attacked and set ablaze by protesters. At least five people have died in the violence.

“Ongoing political uncertainty is driving depreciation in the market,” Zafar Paracha, General Secretary, Exchange Companies Association of Pakistan (ECAP), told Business Recorder.

“However, this should not be the case with the currency,” he said.

The currency dealer said that since last year, market players have been using such events for profiteering.

“We have not seen such financial uncertainty in decades,” he said, urging authorities to take notice of such activities.

Globally, the US dollar sank for a second day against the yen on Thursday, feeling the pressure from lower US Treasury yields after slowing inflation gave traders more confidence that the Federal Reserve is through with rate hikes.

The 10-year Treasury yield, which the dollar-yen pair tends to track, slipped to 3.4252% in Tokyo trading, extending an 8 basis point decline from overnight, after headline CPI printed below 5% for the first time in two years.

The dollar index - which measures the greenback against a basket of six major peers, including the yen – edged 0.05% lower to 101.36.

Oil prices, a key currency indicator, rose on Thursday, clawing back some of the previous day’s losses, supported by fuel demand data from the United States, the world’s top oil consumer.

Inter-bank market rates for dollar on Thursday

BID Rs 298.90

OFFER Rs 299.90

Open-market movement

In the open market, the PKR lost 2 rupees for both buying and selling against USD, closing at 296 and 299, respectively.

Against Euro, the PKR lost 3 rupees for both buying and selling, closing at 320 and 323 respectively.

Against UAE Dirham, the PKR lost 1 rupee 50 paisa for both buying and selling, closing at 82.00 and 82.80, respectively.

Against Saudi Riyal, the PKR lost 2 rupees 25 paisa for buying and 2 rupees 30 paisa for selling, closing at 80.00 and 80.80, respectively.

Open-market rates for dollar on Thursday

BID Rs 296

OFFER Rs 299