Rupee fights back, settles at 278.57 against US dollar

The Pakistani rupee staged an intra-day recovery against the US dollar, strengthening 0.44% in the inter-bank market on Tuesday.

At close, the currency settled at 278.57, an increase of Rs1.23, as per the State Bank of Pakistan (SBP).

Earlier during the day, the rupee had touched 281.5 but clawed back after Finance Minister Ishaq Dar’s announcement that Pakistan has received $2 billion from Saudi Arabia.

On Monday, the Pakistani rupee had weakened, falling 0.68% to settle at 279.8 in the inter-bank market.

In a key development, the government on Monday said relaxation on retiring of Letters of Credit (LCs), recently announced by the SBP, are not unrestrained as LCs will only be honored if sufficient inflows of dollars come in the country.

Separately, Fitch Ratings on Monday upgraded Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC’ from ‘CCC-’ as the country managed to clinch a ‘last-minute’ staff-level agreement with the International Monetary Fund (IMF).

Internationally, the US dollar weakened on Tuesday after Federal Reserve officials signalled that the central bank was nearing the end of its tightening cycle, though it traded in a tight range ahead of a key US inflation report.

Several Fed officials said on Monday the central bank will likely need to raise interest rates further to bring down still-high inflation, but that the end to its current monetary policy tightening cycle is getting close.

The comments knocked the greenback to a two-month low of 101.88 against a basket of currencies in early Asia trade, as traders pared back their expectations of how much further US interest rates have to rise.

Oil prices, a key indicator of currency parity, edged higher on Tuesday, recouping some of the losses from the previous session, as traders focused on supply cuts by the world’s biggest oil exporters Saudi Arabia and Russia and a weaker dollar.

Inter-bank market rates for dollar on Tuesday

BID Rs 278.40

OFFER Rs 278.70

Open-market movement

In the open market, the PKR gained 1.00 rupee for both buying and selling, against USD, closing at 279.00 and 282.00, respectively.

Against Euro, the PKR gained 1.00 rupee for both buying and selling, closing at 302.00 and 305.00 respectively.

Against UAE Dirham, the PKR gained 20 paisa for both buying and selling, closing at 76.50 and 77.30, respectively.

Against Saudi Riyal, the PKR gained 30 paisa for both buying and selling, closing at 73.50 and 74.20, respectively.

Open-market rates for dollar on Tuesday

BID Rs 279.00

OFFER Rs 282.00