Pakistan's rupee was largely stable on Thursday, falling only marginally against the US dollar to settle at 239.71 in the inter-bank market.
As per the State Bank of Pakistan (SBP), the rupee closed at 239.71 after declining by Re0.06 or 0.03%. During the last 15 trading sessions, the rupee has cumulatively declined by Rs21.11 or 8.8% against the US dollar.
On Wednesday, Pakistan's rupee had depreciated for the 14th successive session to settle with a loss of 0.31% at 239.65 against the US dollar in the inter-bank market.
The fall came ahead of the US Federal Reserve's announcement in which it raised the key US interest rate again and said more hikes are coming as it battles soaring prices.
The increase took the policy rate to 3.0-3.25%, and the FOMC said it "anticipates that ongoing increases... will be appropriate."
The rate hikes have added to the dollar's strength, and put several currencies, including the Pakistani rupee under severe pressure.
In less than two months, the rupee has undergone a complete u-turn, approaching its all-time low against the US dollar in the inter-bank market, despite release of the International Monetary Fund (IMF) tranche of $1.16 billion.
The expectation of a rising import bill and a globally strong dollar had kept market participants sceptical.
However, in a key positive development, Pakistan’s current account deficit shrank by 19% during the first two months of this fiscal year (FY23) due to a lower import bill and an increase in exports.
The SBP stated on Wednesday night that cumulatively, the country recorded a current account deficit amounting to $1.92 billion in Jul-Aug of FY23 compared to $2.374 billion in the same period of last fiscal year, depicting a decline of $456 million.
The decline is due to an 11% surge in exports and some 2% contraction in the import bill, the SBP said.
Globally, the dollar surged to a fresh two-decade high on Thursday after the Federal Reserve also projected raising interest rates further and faster than investors had expected in order to tame inflation.
The dollar index, a measure of the greenback against a basket of majors, extended Wednesday gains to make a new 20-year high at 111.72 during the Asia session.
Oil prices, a key determinant of currency parity, rose on Thursday after sliding 1% in the previous session on the prospect of higher Chinese demand and geopolitical risks.
Inter-bank market rates for dollar on Thursday
BID Rs 239.75
OFFER Rs 240.75
Open-market movement
In the open market, the PKR gained 50 paisas for both buying and selling against USD, closing at 242.50 and 244.90, respectively.
Against Euro, the PKR gained 1.50 rupees for buying and 1.55 rupees for selling, closing at 239 and 241.35 respectively.
Against UAE Dirham, the PKR gained 15 paisas for both buying and selling, closing at 66 and 66.65, respectively.
Against Saudi Riyal, the PKR gained 15 paisas for both buying and selling, closing at 64.35 and 65, respectively.
Open-market rates for dollar on Thursday
BID Rs 242.50
OFFER Rs 244.90