Rupee took a hit for the second consecutive session against the US dollar, as the local currency recorded a 0.22% fall in the inter-bank market on Wednesday.
As per the State Bank of Pakistan (SBP), the rupee closed at 174.89 after a day-on-day depreciation of 39 paisas or 0.22%. On Tuesday, the currency dipped by 0.02% for the first time after seven consecutive sessions.
On Friday, rupee had gained over Re1 or 0.60% to settle at its highest level since November 23 against the greenback. The rupee had been on a gaining spree amid International Monetary Fund (IMF) approval for its sixth review of the Extended Fund Facility (EFF).
Rupee's winning streak ends, falls marginally against US dollar
“This is part of a daily fluctuation, as the currency is moving towards stabilisation,” Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited, told Business Recorder.
Rauf said that despite IMF funding, rupee will remain around 175, amid external pressure on account of import outflows.
Talking about the upcoming remittance figures, Rauf said the currency market will only react if the amount is above or below expectation of $2.5 billion.
Remittances play a vital role in meeting Pakistan's external financing needs as the country continues its battle against the current account deficit.
Rauf said that the existing funding requirement is being met either through loan rollover or by taking new loans. “Positivity will come only if funds generated through exports increase,” he said.
Meanwhile, oil prices, a key determinant of Pakistan's import figure, slipped for the third session on Wednesday on profit-taking due to concerns of a possible rise in supplies from Iran despite industry data showing a surprising drop in US oil inventories.
Brent crude futures edged down 8 cents, or 0.1%, to $90.70 a barrel, while U.S. West Texas Intermediate crude was at $89.18 a barrel, down 18 cents, or 0.2%.
Inter-bank market rates for dollar on Wednesday
BID Rs 175
OFFER Rs 175.10
Open-market movement
In the open market, the PKR lost 30 paisas for both buying and selling against USD, closing at 175.80 and 176.80, respectively.
Against Euro, the PKR lost 60 paisas for buying and one rupee for selling, closing at 199.10 and 201, respectively.
Against UAE Dirham, the PKR lost 22 paisas for buying and 30 paisas for selling, closing at 48.62 and 49.10, respectively.
Against Saudi Riyal, the PKR lost 20 paisas for buying and 25 paisas for selling, closing at 46.35 and 46.80, respectively.
Open-market rates for dollar on Wednesday
BID Rs 175.80
OFFER Rs 176.80