Pakistan’s rupee fell marginally against the US dollar, depreciating Re0.01 in the inter-bank market on Monday.

As per the State Bank of Pakistan (SBP), the rupee closed at 223.95.

Rupee largely stable, settles at 223.94 against US dollar

During the previous week, the rupee remained largely stable and fell 0.34% against the US dollar in the inter-bank market as the SBP and Finance Minister Ishaq Dar moved to quell nerves over the country’s upcoming payment obligations.

The rupee lost value in four of the five sessions, but remained within the 223 level as restrictions imposed over import payments, opening of letters of credit, and foreign-currency carrying limits on travelers meant the currency stayed administratively under control.

In a development that took markets by surprise, the Monetary Policy Committee (MPC) of SBP on Friday raised the key interest rate by 100bps, taking it to 16%, the highest since 1998-1999 when it stood at 16.5%.

The Pakistan Business Council (PBC) said expecting the rupee to defy gravity, in view of depleting foreign exchange reserves, "is unrealistic".

“Bolstering rupee through administrative controls renders exports less competitive and imports, even curbed, cheaper. Where is the sense in this when we want the reverse — higher exports?"

Internationally, the dollar climbed on Monday as protests in China against the government’s anti-COVID policies made investors turn away from riskier assets, and consigned the Chinese yuan to a more than two-week low against the safe-haven greenback.

The protests have flared across China and spread to several cities in the wake of an apartment fire that killed 10 people in Urumqi in the country’s far west.

Against a basket of currencies, the US dollar index rose 0.07% to 106.41, edging away from its recent three-month low of 105.30.

Oil prices, a key indicator of currency parity, slumped on Monday as street protests against strict COVID-19 curbs in China, the world’s biggest crude importer stoked concern about the outlook for fuel demand.

Inter-bank market rates for dollar on Monday

BID Rs 224

OFFER Rs 225

Open-market movement

In the open market, the PKR remained unchanged for both buying and selling against USD, closing at 228.75 and 231, respectively.

Against Euro, the PKR lost 50 paisas for both buying and selling, closing at 247 and 249 respectively.

Against UAE Dirham, the PKR remained unchanged for buying while gaining 5 paisas for selling, closing at 65.70 and 66.30, respectively.

Against Saudi Riyal, the PKR remained unchanged for buying while gaining 10 paisas for selling, closing at 63.70 and 64.20, respectively.

Open-market rates for dollar on Monday

BID Rs 228.75

OFFER Rs 231