Pakistan's rupee remained unchanged against the US dollar in the inter-bank market on Monday amid a series of measures taken by the central bank to curb speculative buying and selling of foreign exchange.
As per the State Bank of Pakistan (SBP), the PKR closed at 178.04 against the USD. This remains the lowest closing level for the Pakistani rupee in history.
Cumulatively, the rupee has depreciated over 11% CYTD and 13% on a FYTD basis against the US dollar.
Against USD: Pakistan's rupee crosses 178, hits fresh historic low
Stability in the market comes a day after the SBP introduced more measures to enhance documentation and transparency in foreign exchange transactions through Exchange Companies.
The SBP amended the regulations governing sale of foreign exchange to individuals by exchange companies. It fixed a maximum limit of $100,000 (or equivalent in other foreign currencies) per person per calendar year for buying of foreign currency from Exchange Companies.
For this purpose, it has asked the Exchange Companies to obtain an undertaking from individual customers at the time of each sale transaction exceeding $ 1,000/- (or equivalent in other currencies) that they have not already reached the limit of USD 100,000/- per calendar year or USD 10,000/- per day from all exchange companies and these limits will not be breached after the current transaction.
Purchase of forex by individuals: SBP fixes $100,000 per person per year maximum limit
This step is primarily taken to discourage speculative buying and selling of foreign exchange from the exchange companies without affecting the ability of the market to serve the genuine needs of the public, the central bank had said.
“The SBP circular amending instructions for Exchange Companies is a move towards documentation,” said Asad Rizvi, Ex-Treasury Head at Chase Manhattan.
“It will help to restrict outflow of PKR to some extent. But only narrowing of trade gap will help PKR to stabilise,” said Rizvi.
Pressure on Pakistan's currency has increased since May this year as a widening current account deficit take toll on the rupee-dollar parity. While the SBP has taken measures to curb the rupee-decline, many believe a bulging import bill is key behind the rupee's historic fall.
Inter-bank market rates for dollar on Monday
BID Rs 178
OFFER Rs 178.10
Open-market movement
In the open market, the PKR gained 1.50 rupees for both buying and selling against USD, closing at 179 and 180, respectively.
Against Euro, the PKR gained 3 rupees for both buying and selling, closing at 198 and 199.50, respectively.
Against UAE Dirham, the PKR gained 1.10 rupees for both buying and selling, closing at 49 and 49.40, respectively.
Against Saudi Riyal, the PKR gained 40 paisas for buying and 45 paisas for selling, closing at 47 and 47.40, respectively.
Open-market rates for dollar on Monday
BID Rs 179
OFFER Rs 180