Pakistan’s rupee ended on the losing side for the seventh straight session against the US dollar, falling nearly 0.1% in the inter-bank market on Wednesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 226.37 after a fall of Re0.22 against the greenback. The rupee has depreciated over 22.1% against the US dollar during the ongoing calendar year.

On Tuesday, the rupee depreciated against the US dollar, to settle at 226.15 after a decline of Re0.33 or 0.15%.

Market experts and currency dealers have attributed volatility in the currency to the rise in smuggling of US dollars to neighbouring countries, which is also driving the informal/grey market.

On Wednesday, Federal Minister for Finance and Revenue Ishaq Dar reiterated that US dollars are being smuggled to a neighbouring country.

“Smuggling has to be stopped and departments are working to address the issue,” he said. “This has led to the difference in rates being offered in the open and grey markets,” said Dar.

In a key development on Tuesday, the SBP decided to withdraw the restrictions placed on imports with effect from January 2, 2023.

The SBP also asked banks to prioritise/facilitate imports related to essential items, energy, agriculture inputs, imports by export-oriented industries, and imports on a deferred payment basis.

In May and July this year, the SBP imposed some restrictions on imports and directed banks for prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC before initiating transactions for the import of several goods pertaining to HS Code Chapter 84, 85 and certain items of Chapter 87. These chapters include power-generating machinery, electrical machinery, mobile phone (CKD) and motor cars (CKD).

Internationally, China’s yuan weakened on Wednesday, as the US dollar strengthened on expectations of a sustained inflationary trend fuelled by a prospective surge of outbound Chinese travellers.

The global dollar index rose to 104.266 from the previous close of 104.179.

Oil prices, a key indicator of currency parity, fell on Wednesday on concerns that rising COVID-19 cases in China, the world’s top oil importer, will disrupt its economic recovery and fuel demand growth as it unwinds its pandemic restrictions.

Inter-bank market rates for dollar on Wednesday

BID Rs 226.30

OFFER Rs 227.30

Open-market movement

In the open market, the PKR lost 55 paisas for buying and 50 paisas for selling against USD, closing at 233.25 and 235.50, respectively.

Against Euro, the PKR lost 50 paisas for both buying and selling, closing at 261.50 and 263.50 respectively.

Against UAE Dirham, the PKR remained unchanged for both buying and selling, closing at 68.50 and 69, respectively.

Against Saudi Riyal, the PKR gained 10 paisas for both buying and selling, closing at 65.20 and 65.70, respectively.

Open-market rates for dollar on Wednesday

BID Rs 233.25

OFFER Rs 235.50