KARACHI: The rupee depreciated another 1.46% in the inter-bank market during the previous week, closing at 305.47 against the US dollar on Friday but, more worryingly, the gap with open-market rates continued to widen.
The rupee closed lower in four of the five sessions in the inter-bank market, only halting its 10-session depreciation on Friday with a marginal 0.02% gain. However, in the open market, it closed at 325 and 328, a massive premium of over 6% with the buying rates. During the week, the US dollar became Rs14 more expensive in the open market.
The premium, or gap, between the two markets is crucial since the International Monetary Fund (IMF) has prescribed a 1.25% difference in its country report on Pakistan.
Experts have warned that the rupee’s slide is likely to continue amid the gradual rolling back of restrictions on imports, and a simultaneous widening current account deficit together with falling foreign exchange reserves. While the inter-bank market has played ‘catch-up’ with its peer open market, a free hand and higher demand for dollars will continue to put pressure on the rupee.
In addition to this worry, Pakistan’s economic problems will be compounded as further dollar inflows are not in sight and remittances are unlikely to pick up enough to counter the pressure.
Open-market rates
In the open market, the PKR lost 14.00 rupees for both buying and selling against USD, closing at 325.00 and 328.00, respectively.
Against Euro, the PKR lost 14.00 rupees for buying and 14.50 rupees for selling, closing at 350.00 and 353.00, respectively.
Against UAE Dirham, the PKR lost 3.50 rupees for both buying and selling, closing at 89.70 and 90.50, respectively.
Against Saudi Riyal, the PKR lost 4.00 rupees for both buying and selling, closing at 87.20 and 88.00, respectively.
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THE RUPEE
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Weekly inter-bank market rates for dollar
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Bid Close Rs. 305.45
Offer Close Rs. 305.65
Bid Open Rs. 300.80
Offer Open Rs. 301.05
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Weekly open-market rates for dollar
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Bid Close Rs. 325.00
Offer Close Rs. 328.00
Bid Open Rs. 311.00
Offer Open Rs. 314.00
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Copyright Business Recorder, 2023
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