Pakistan's rupee weakened further against the US dollar, depreciating by five paisas to close at a new record low in the inter-bank market on Wednesday.
As per the State Bank of Pakistan (SBP), the PKR closed at 178.24 against the USD after a day-on-day depreciation of five paisas or 0.03%. On Tuesday, just a day ago, the PKR had closed at the then-record low of 178.19 against the USD.
Cumulatively, the rupee has depreciated over 11% CYTD and 13% on a FYTD basis against the US dollar.
“The decline comes as oil prices continue to surge in the international market, raising concerns on the import front,” Fahad Rauf, Head of Research at Ismail Iqbal Securities, told Business Recorder.
Against USD: Pakistan's rupee hits yet another low
Rauf said that oil prices have surged from $70 to $80 per barrel in a matter of days, despite the surge in Omicron cases.
On Wednesday, oil prices edged higher after rallying overnight as industry data showed a decline in US inventories, boosting demand sentiment. Brent crude rose 26 cents, or 0.3%, at $79.20 a barrel by 0759 GMT.
Rauf added that oil price hike is a matter of concern for Pakistan, which heavily relies on import of oil to meet its energy needs, but is battling a deficit issue.
The current account posted a deficit of $7.1 billion for July-November 2022 as against a surplus of $1.9 billion in the same period of the previous year.
“Even the central bank has said that the deficit will remain on a higher side in the coming months,” said Rauf, while adding that the impact of SBP measures including hike in interest rate would be reflected in 6-7 months.
Talking about the amended Finance, and State Bank of Pakistan (SBP) autonomy bills, Rauf said that the bills will be passed as they are a prerequisite for the revival of the International Monetary Fund (IMF) programme, under which Pakistan would receive a $1-billion inflow.
He said that withdrawal of tax exemptions in the expected 'mini-budget' will not impact the economic activity much.
Inter-bank market rates for dollar on Wednesday
BID Rs 178.20
OFFER Rs 178.30
Open-market movement
In the open market, the PKR lost 30 paisas for buying while gaining 20 paisas for selling, against USD closing at 179.80 and 180.30, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 200.50 and 202, respectively.
Against UAE Dirham, the PKR gained 10 paisas for both buying and selling, closing at 50.70 and 51.10, respectively.
Against Saudi Riyal, the PKR gained 10 paisas for buying while remaining unchanged for selling, closing at 47 and 47.40, respectively.
Open-market rates for dollar on Wednesday
BID Rs 179.80
OFFER Rs 180.30