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KARACHI: The downward trajectory of Pakistan's rupee continued against the US dollar, as the PKR recorded yet another all-time low of 170.66 in the inter-bank market on Thursday.
As per the State Bank of Pakistan (SBP), the rupee lost another 18 paisas or 0.11% day-on-day, falling for the seventh successive time against the dollar in the inter-bank market. On Wednesday, the rupee closed over the 170 level for the first time.
The widening current deficit, led by excessive growth in imports, has weakened the local currency, which has lost nearly 11% since its recent high in May 2021.
Taking note of the situation, Fitch Ratings also revised down its forecast for the PKR for both this year and next due to a variety of factors including an increased flow of US dollars into neighbouring Afghanistan, amid the takeover by the Taliban.
Fitch in its latest report forecasted that the rupee's average rate this year is now 164 to the USD compared with 158 previously. For 2022, Fitch now expects an average rate of 180 versus a previous forecast of 165.
"Our expectation for the currency to weaken further is based on Pakistan's worsening terms of trade, tighter US monetary policy, alongside the flow of US dollars out of Pakistan and into Afghanistan," it said.
On the other hand, the SBP has increased efforts to arrest the rupee decline. The measures included mandating banks to share a five-day schedule of upcoming import payments, revising it upwards from the earlier two-day directive, and directing them to seek permission for imports that are valued at $500,000 per transaction, cutting in half the original payment ceiling of $1 million. It also decided on Thursday to impose 100% cash margin requirements on the import of 114 items.
Fitch, however, said that the undervaluation of the Pakistani rupee on a real effective exchange rate basis would limit excessive weakness in the currency.
Open-market movement
In the open market, the PKR lost one rupee for both buying and selling against the USD, closing at 172.50 and 173.50, respectively, keeping the spread of one rupee intact.
Against the Euro, the PKR remained unchanged for both buying and selling, closing at 199.50 and 201, respectively.
Against the UAE Dirham, the PKR lost 10 paisas for both buying and selling, closing at 48 and 48.20, respectively.
Against the Saudi Riyal, the PKR lost 15 paisas for both buying and selling, closing at 45.80 and 46, respectively.
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Open Bid Rs 172.50
Open Offer Rs 173.50
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Interbank Closing Rates: Interbank Closing Rates For Dollar on Thursday.
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Bid Rate -
Offer Rate -
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RUPEE IN LAHORE: The Pak rupee continued to keep going down for the fourth consecutive day against the greenback touching the all-time low mark at Rs 173.50 in the local currency market on Thursday.
The short supply phenomenon of the greenback continued to prevail for another day in the market which helped its further appreciation for buying and selling at Rs 172.50 and Rs 173.50 against the overnight closing rate of Rs 171.50 and Rs 172.50, respectively, local currency dealers said.
Furthermore, the rupee stayed unchanged against the pound sterling for buying and closed at Rs 231.50 whereas it lost 40 paisas for selling and closed at Rs 233.00 against the overnight closing rate of Rs 233.40, they added.
RUPEE IN ISLAMABAD AND RAWALPINDI: The dollar gained Rs 1 against the rupee at the open currency markets of Islamabad and Rawalpindi here on Thursday.
The dollar opened at Rs 173.40 (buying) and Rs 173.50(selling) against last rate of Rs 172.40 (buying) and Rs 172.50(selling).
It closed at Rs 173.40 (buying) and Rs 173.50(selling).
The buying and selling rates of one tola of gold remained Rs. 109,700 (buying) and Rs109,500(selling).
Copyright Business Recorder, 2021
