An apparent recovery was witnessed in the value of the rupee against the dollar on the money market on Wednesday in the process of trading activity, marketmen said. Just after the Pakistan State Bank's (SBP) decision in which it raised its main policy rate by 100 basis points to 13.25 percent, the local currency showed modest gain after a long-time, they said.
The central bank's move is citing increased inflationary pressures and a likely near-term rise in prices. The increase follows this month's accord with the International Monetary Fund on a $6 billion loan package that comes with tough conditions aimed at cutting Pakistan's substantial fiscal and current account deficits and bolstering its shrinking currency reserves.
In the third Asian trade, the dollar stood firm on Wednesday after upbeat US data further tempered expectations of aggressive policy easing by the Federal Reserve later this month.
The struggling pound and euro also provided additional impetus to the US currency.
The dollar index against a basket of six major currencies was effectively unchanged at 97.365 after gaining 0.5% the previous day.
The dollar rose after stronger-than-expected June US retail sales data dampened expectations that the Fed could cut interest rates by 50 basis points (bps) rather than 25 bps at its month-end policy review.
The losses came after a survey by the ZEW institute showed that the mood among German investors deteriorated more sharply than expected in July amid the prolonged trade dispute between China and the United States as well as political tensions with Iran.
The dollar was trading against the Indian rupee at Rs 68.805, the greenback was at 4.114 in terms of the Malaysian ringgit and the US currency was at 6.883 in relation to the Chinese yuan.
========================
Open Bid Rs.159.30
Open Offer Rs.160.30
========================
========================
Bid Rate Rs.159.80
Offer Rate Rs.159.90
========================
Following lack of buyers' interest in the market, the greenback could not sustain and ended lower for buying and selling at Rs 160.00 and Rs 160.60 against the overnight closing trend of Rs 160.50 and Rs 161.10 respectively, local currency dealers said.
Likewise, the national currency also followed the suit in relation to the pound sterling. The pound's buying and selling rates declined from the Tuesday's closing of Rs 200.40 and Rs 202.10 to Rs 198.50 and Rs 200.00 respectively, they added.
The dollar opened at Rs 160.50(buying) and Rs 160.60 (selling) against last rate of Rs 160.80(buying) and Rs 160.90 (selling). It closed at Rs 160.50(buying) and Rs 160.60 (selling).
The buying and selling rates of one tola of gold was Rs 80,300 (selling) and Rs 80,000 (buying) in the local Sarafa (gold) markets of Rawalpindi and Islamabad.