Rupee ends 8-session losing streak, settles at 287.04 against US dollar

Propelled by the central bank’s late-night decision to allow Exchange Companies (ECs) to import US dollars in cash, the Pakistani rupee ended its eight-session losing streak against the greenback, as it appreciated 0.52% on Wednesday.

At close, the rupee settled at 287.04, an increase of Rs1.48, as per the State Bank of Pakistan (SBP).

On Tuesday, the ongoing downward momentum pulled the Pakistani rupee lower for the eighth consecutive session, depreciating 0.21% to settle at 288.52 against the US dollar in the inter-bank market.

However, in a key development, the SBP on Tuesday night allowed the Exchange Companies (ECs) to import cash US dollars against the value of their export consignments of permissible foreign currencies within five working days, through reputed cargo or security companies.

Previously, ECs were allowed to export the permissible currencies in cash but were required to bring dollars in their bank accounts. Now, with this move, ECs can also bring cash dollars through cargo or security companies.

Currency dealers termed the development positive, which will improve the supply of US dollars in the market.

“In the coming days, the US dollar rate would decline in both inter-bank and open markets,” said Malik Bostan, President of the Forex Association of Pakistan, while talking to a private channel.

“The rate of US dollar jumped from 270 to 290 amid a shortage of greenback in the open-market, leading to an increase in the gap of rates,” he said.

Meanwhile, Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP), also lauded the development, saying this would address the US dollar shortage in the market.

Globally, the US dollar hovered close to a two-week high versus the euro on Wednesday as traders awaited crucial policy decisions from the nations’ central banks this week.

The US dollar index - which measures the currency against six major peers, but is heavily weighted toward the euro - edged 0.06% higher to 101.37 in the Asian morning, after pushing as high as 101.65 overnight for the first time since July 11.

Continued signs of a resilient US economy in the face of the Federal Open Market Committee’s (FOMC) steep series of interest rate increases have helped buoy the dollar index from a 15-month trough of 99.549 reached a week ago.

Oil prices, a key indicator of currency parity, drifted near three-month highs on Wednesday, with investors cautious ahead of an expected Federal Reserve rate hike later in the day and a spike in US crude supplies.

Inter-bank market rates for dollar on Wednesday

BID Rs 287.00

OFFER Rs 287.20

Open-market movement

In the open market, the PKR gained 1.50 rupee for both buying and selling against USD, closing at 289.00 and 292.00, respectively.

Against Euro, the PKR gained 3.00 rupees for both buying and selling, closing at 318.00 and 321.00, respectively.

Against UAE Dirham, the PKR gained 10 paisa for buying and unchanged for selling, closing at 80.70 and 81.50, respectively.

Against Saudi Riyal, the PKR gained 20 paisa for both buying and selling, closing at 77.30 and 78.00, respectively.

Open-market rates for dollar on Wednesday

BID Rs 289.00

OFFER Rs 292.00