Pakistan's rupee once again registered a decline on Saturday, depreciating 0.03% against the US dollar in the inter-bank market to cap off a volatile month for the currency that saw it fluctuate wildly in both directions.
As per the State Bank of Pakistan (SBP), the rupee closed at 185.69 after a day-on-day decline of 6 paisas, or 0.03%. On Friday, the rupee had closed at 185.63 after a recovery of 0.13%.
The change meant the rupee ended with a net 1.2% fall in April, but the movement was more extreme with a record low of 188.18 also hit during the month.
Rupee rebounds, appreciates 0.13% against US dollar
Talking to Business Recorder, Pak-Kuwait Investment Company's Head of Research Samiullah Tariq stated that rupee witnessed a meagre change, however, there was no big reason behind the fall.
“The local currency is largely stable and it is expected to remain at this level while facing minor fluctuations till Eid,” he said.
Earlier, he detailed that the flow of remittances usually registers an uptick right before Eid, lending support to the local currency.
“Overseas Pakistanis send earnings to their families back home for Eid expenditure,” he stated.
He held the view that the trend in the foreign exchange market would become clearer after the holidays because foreign remittances were currently influencing the direction of rupee against major currencies of the world.
On Friday, the State Bank of Pakistan (SBP) also reported injecting Rs4.09 trillion into the financial market through open market operations (OMO). This was equal to almost 20% of the total deposits of Rs20.27 trillion at domestic banks.
Pakistan also reported a further decrease in its foreign exchange reserves with the SBP-held level reaching $10.56 billion on Thursday. Total liquid foreign reserves held by the country stood at $16.67 billion on April 23, 2022, stated the SBP.
“Currently, the SBP seems to be under pressure with reserves standing at $10.9 billion (as on 16 April 2022). A build-up of forex reserves is required to provide much-needed cushion to ensure that import cover remains above three month at least,” stated a report from Arif Habib Limited.
“Moreover, dollar is being boosted by safe-haven demand, high inflation and a hawkish Federal Reserve. If these tailwinds continue to lift the greenback in FY22-23, the US dollar index will continue marching north, weakening rupee further against the greenback.”
Inter-bank market rates for dollar on Saturday
BID Rs 185.30
OFFER Rs 185.80
Open-market movement
In the open market, the PKR lost 25 paisas for buying while remaining unchanged for selling against USD, closing at 186 and 187, respectively.
Against Euro, the PKR lost 1.90 rupees for buying and 2 rupees for selling, closing at 196 and 198, respectively.
Against UAE Dirham, the PKR lost 10 paisas for buying while remaining unchanged for selling, closing at 50.50 and 50.90, respectively.
Against Saudi Riyal, the PKR lost 18 paisas for buying while remaining unchanged for selling, closing at 49 and 49.30, respectively.
Open-market rates for dollar on Saturday
BID Rs 186
OFFER Rs 187