Pakistan’s rupee finally ended its 13-session appreciation run against the US dollar, and registered a marginal decline of 0.04% in the inter-bank market on Wednesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 217.88 after depreciating Re0.09 or 0.04%.In the last fourteen trading sessions, the rupee has cumulatively appreciated Rs21.82 or 10%.

On Tuesday, the rupee had gained against the US dollar for the 13th successive session, and closed at 217.79 after appreciating Re0.18 or 0.08%.

The recent appreciation of rupee is being attributed to a shift in sentiment and actions taken by the central bank against players involved in speculative activity in the currency market.

Talking to Business Recorder, Fahad Rauf, Head of Research at Ismail Iqbal Securities said that the initial improvement in rupee’s value was driven by a change in sentiment in the market, amid the arrival of Ishaq Dar at the helm of the Ministry of Finance.

“However, after that, a number of key developments have also taken place driving the rupee’s value. The flow of remittances shifted back to formal channels. Moreover, exporters are also releasing their proceeds following the change in sentiment, as the market was expecting the rate to drop,” he said.

Rauf added that pressure from import payments had also subsided on account of an economic slowdown.

In a key development, the International Monetary Fund (IMF) has projected GDP growth rate for Pakistan at 3.5% for 2023 against 6% in 2022, but it does not include the impact of the recent floods.

The IMF World Economic Outlook (WEO) report “World Economic Outlook Countering the Cost-of-Living Crisis,” stated that the Fund has projected inflation rate at 19.9% for 2023 against 12.1% in 2022. However, the report has projected consumer prices for the end of period of 2023 at 15% against 21.3% in 2022.

Internationally, the dollar scaled fresh 24-year heights on Wednesday, as traders braced for US inflation data and its implications for further Federal Reserve rate hikes.

The US dollar index - which measures the greenback against a basket of six major peers, including the yen, sterling and the euro - edged 0.08% higher to 113.43, after earlier touching the highest since Sept. 29 at 113.59.

Oil prices, a key indicator of currency parity, slipped for a third straight session on Wednesday as the dollar gained steam and investors braced for U.S. inflation data, while global recession risks and tightening COVID-19 curbs in China triggered worries about fuel demand.

Inter-bank market rates for dollar on Wednesday

BID Rs 217.90

OFFER Rs 218.90

Open-market movement

In the open market, the PKR lost 1.50 rupees for both buying and selling against USD, closing at 218.50 and 220.50, respectively.

Against Euro, the PKR lost 2 rupees for both buying and selling, closing at 215 and 217 respectively.

Against UAE Dirham, the PKR lost 80 paisas for buying and 70 paisas for selling, closing at 60.50 and 61, respectively.

Against Saudi Riyal, the PKR lost 70 paisas for both buying and selling, closing at 58.70 and 59.20, respectively.

Open-market rates for dollar on Wednesday

BID Rs 218.50

OFFER Rs 220.50