After showing signs of improving, Pakistan's rupee depreciated 0.15% against the US dollar in the inter-bank market on Tuesday, closing over the 176 level.
As per the State Bank of Pakistan (SBP), the rupee closed at 176.18 after a day-on-day depreciation of 26 paisas or 0.15%. The decline comes after the currency registered a gain of 0.09% on Monday, as it closed below the 176 level for the first time since December 1 last year.
Despite Tuesday's fall, it has still recovered 1.17% after touching its all-time low of Rs178.24 on December 29, 2021.
Rupee gains to strongest level against US dollar since December 1
“Oil prices are high, which has dented market sentiments as the upwards trend in commodity prices has led to a forecasting of a higher import bill, which is a worrying factor,” Saad Khan, Head of Research at IGI Securities, told Business Recorder.
Oil prices rose more than $1 on Tuesday to an over seven-year high on worries about possible supply disruptions after Yemen's Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition.
Brent crude futures rose $1.01, or 1.2%, to $87.48 a barrel by 0316 GMT, after earlier hitting a peak of $87.55, their highest since October 29, 2014.
Meanwhile, other developments also dominated the market as it was learnt that Pakistan would issue US dollar-denominated Sukuk bonds to jack up its foreign exchange reserves, whereas, the International Monetary Fund (IMF) board will meet on January 28 for Pakistan's sixth review under the Extended Fund Facility (EFF).
Moody's Investors Service assigned a B3 backed senior unsecured rating to the proposed US dollar-denominated trust certificates (Sukuk) issuance by the Government of Pakistan through The Pakistan Global Sukuk Programme Company Limited.
"The assigned rating mirrors the Government of Pakistan's current issuer rating," stated Moody's in its note.
Commenting on the said developments, Khan said funds generated from it will be good for foreign exchange reserves.
“This will give a break to the rupee as well, as the earlier fear of rampant devaluation has been subsided due to IMF and Sukuk issue.
“However, global commodity prices will continue to dominate sentiment,” he said.
Inter-bank market rates for dollar on Tuesday
BID Rs 176.10
OFFER Rs 176.20
Open-market movement
In the open market, the PKR lost 50 paisas for buying while remaining unchanged for selling, against USD closing at 177.50 and 178, respectively.
Against Euro, the PKR gained 1.50 rupees for both buying and selling, closing at 200 and 202, respectively.
Against UAE Dirham, the PKR lost 10 paisas for both buying and selling, closing at 48.62 and 49.10, respectively.
Against Saudi Riyal, the PKR lost 35 paisas for both buying and selling, closing at 46.75 and 47.20, respectively.
Open-market rates for dollar on Tuesday
BID Rs 177.50
OFFER Rs 178