The Pakistani rupee maintained its downward trajectory against the US dollar for the third consecutive session, depreciating 1.34% on Tuesday, as euphoria over foreign exchange inflows in the country subsided and gave way to economic fundamentals.
At close, the currency settled at 283.04, a decrease of Rs3.78, as per the State Bank of Pakistan (SBP).
On Monday, the rupee sustained back-to-back losses against the US dollar, depreciating another 0.6% to settle at 279.26 in the inter-bank market.
Experts said the knee-jerk reaction after the International Monetary Fund (IMF) programme, which resulted in the rupee’s appreciation, is reversing.
“As import restrictions are being lifted amid IMF demands, the pressure would stay on the local currency,” Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited, told Business Recorder.
“The backlog created due to import and dividend restrictions is being cleared,” he said, adding that the rupee would continue to show gradual depreciation until flows improve.
In a related development, the top military brass vowed to fully support the strategic initiatives planned by the government of Pakistan for the revival of the economy by providing all possible technical and management support for the overall good of the people of Pakistan.
Globally, the US dollar wobbled near an over one-year low against its major peers on Tuesday, as investors awaited fresh catalysts to gauge if the greenback has further downside in the wake of last week’s cooler-than-expected US inflation report.
The US dollar index, which measures the greenback against a basket of six currencies, dipped slightly to 99.84 in early Asia trade, after having tumbled to its lowest since April 2022 on Friday.
The index also clocked its worst week of 2023 last week, after data showed US inflation subsided further with consumer prices registering their smallest annual increase in more than two years, taking pressure off the Federal Reserve to continue raising interest rates.
Oil prices, a key indicator of currency parity, were little changed on Tuesday as investors weighed a possible tightening of US crude supplies against weaker-than-expected Chinese economic growth.
Inter-bank market rates for dollar on Tuesday
BID Rs 283.10
OFFER Rs 283.30
Open-market movement
In the open market, the PKR lost 4.00 rupees for both buying and selling, against USD, closing at 287.00 and 290.00, respectively.
Against Euro, the PKR lost 5.00 rupees for both buying and selling, closing at 317.00 and 320.00 respectively.
Against UAE Dirham, the PKR lost 1.00 rupee for both buying and selling, closing at 78.50 and 79.25, respectively.
Against Saudi Riyal, the PKR lost 1.50 rupee for both buying and selling, closing at 75.80 and 76.50, respectively.
Open-market rates for dollar on Tuesday
BID Rs 287.00
OFFER Rs 290.00