Inter-bank: rupee hits new low, settles at 304.45 against US dollar

Pakistani rupee’s depreciation continued as it dropped to yet another record low against the US dollar, settling at 304.45 in the inter-bank market on Wednesday.

At close, the rupee was down Rs1.40 or 0.46%, as per the State Bank of Pakistan (SBP).

On Tuesday, the rupee had closed at the then-record low of 303.05 against the US dollar in the inter-bank market.

In a related development, Moody’s Investors Services said on Tuesday that weak infrastructure and governance act as additional constraints for Pakistan.

Moody’s in its report stated that a lack of fiscal capacity has constrained resources allocated to capital expenditure in Pakistan, where infrastructure quality is significantly worse than for other large Asian economies.

Globally, the US dollar nursed its sharpest drop in a month and a half on Wednesday, as investors bet that softer-than-expected U.S. jobs data reduced the chances of further Federal Reserve rate hikes.

The US dollar index - which measures the currency against six developed-market peers including the yen and euro - was little changed at 103.57 after pulling back from as high as 104.36 overnight after a sharp drop in the US.

Oil prices, a key indicator of currency parity, extended gains on Wednesday after industry data showed a large draw in crude inventories in the U.S., the world’s biggest fuel consumer, and as a hurricane in the Gulf of Mexico kept investors on edge.

Inter-bank market rates for dollar on Wednesday

BID                            Rs 304.40

OFFER                      Rs 304.60

Open-market movement

In the open market, the PKR lost 1.50 rupee for both buying and selling against USD, closing at 316.50 and 319.50, respectively.

Against Euro, the PKR lost 1.00 rupee for both buying and selling, closing at 343.00 and 346.00, respectively.

Against UAE Dirham, the PKR lost 30 paisa for both buying and selling, closing at 87.50 and 88.30, respectively.

Against Saudi Riyal, the PKR lost 30 paisa for both buying and selling, closing at 85.00 and 85.80, respectively.

Open-market rates for dollar on Wednesday

BID                            Rs 316.50

OFFER                      Rs 319.50