The Pakistani rupee remained under pressure against the US dollar on Thursday, closing over the 271 mark in the inter-bank market.
As per the State Bank of Pakistan (SBP), the currency settled at 271.36, a decline of Rs2.53 or 0.93% against the US dollar. The currency has depreciated by 24.51% during the ongoing fiscal year against the greenback.
Thursday’s closing is the weakest level for the rupee, and comes as talks between the International Monetary Fund (IMF) and Pakistan continued in Islamabad.
On Wednesday, Pakistan’s rupee was under pressure again, as it had settled at 268.83 after depreciation of Rs0.94 or 0.35%.
In a key development, the IMF mission reportedly questioned the top brass of the Power Division for two consecutive days on failing to meet commitments including increase in tariff, poor performance of the sector and restricting subsidies only to vulnerable domestic consumers.
Moreover, the international lender revised upward the inflation rate for Pakistan, i.e. from 19.9% to 21% in 2023, attributing the raise to floods and exchange rate depreciation.
Pakistan’s headline inflation clocked in at 27.6% in January, showed data released by the Pakistan Bureau of Statistics (PBS) on Wednesday. This is the highest inflation reading since 27.8% recorded in May 1975.
Globally, the dollar tumbled on Thursday after the US Federal Reserve said it had turned a corner in the fight against inflation, giving markets a confidence boost that the end of its rate-hike campaign is near.
The Fed’s statement, which came after the conclusion of its two-day policy meeting where policymakers agreed to raise rates by 25 basis points, marked the central bank’s first explicit acknowledgement of slowing inflation.
The dollar dived following Federal Reserve Chairman Jerome Powell’s remarks, and against a basket of currencies, the US dollar index fell to a fresh nine-month low of 100.80.
Oil prices, a key indicator of currency parity, rebounded on Thursday after tumbling in the previous session as a weaker dollar brought back some appetite for risk assets and the OPEC+ decision to roll over an output cut helped ease oversupply concerns.
Inter-bank market rates for dollar on Thursday
BID Rs 271.50
OFFER Rs 273.50
Open-market movement
In the open market, the PKR lost 1.50 rupees for buying and 50 paisas for selling against USD, closing at 273.50 and 275.50, respectively.
Against Euro, the PKR lost 1.50 rupees for both buying and selling, closing at 294 and 296.50 respectively.
Against UAE Dirham, the PKR lost 20 paisas for buying and 10 paisas for selling, closing at 74.20 and 74.80, respectively.
Against Saudi Riyal, the PKR remained unchanged for both buying and selling, closing at 71.50 and 72, respectively.
Open-market rates for dollar on Thursday
BID Rs 273.50
OFFER Rs 275.50