brecorder.com
KARACHI: Pakistan's rupee reached a fresh low against the US dollar, closing near the 171 level in the inter-bank market on Wednesday.
As per the State Bank of Pakistan (SBP), the PKR closed at 170.96 against the USD, a day-on-day decline of 16 paisas or 0.09%. This is the weakest the rupee has been against the US currency, surpassing the 170.8 recorded earlier.
Pakistan has been battling a widening current account deficit and high import bill, with commodity prices at the international markets making it worse for the South Asian economy.
According to data released by the PBS on Monday, Pakistan's trade deficit widened by 100.6% to $11.7 billion during the first quarter (July-September) of the ongoing fiscal year compared with $5.8 billion in the same period of the previous year. Imports stood at $18.631 billion during July-September, a 65% increase year-on-year.
“The PBS data does have an impact on the rupee,” Tahir Abbas, Head of Research at Arif Habib Limited, told Business Recorder.
He said that the problem of import growth is further compounded by a record increase in commodity prices, especially oil. “Oil payments are a major component of our import bill, then comes food items and machinery,” added Abbas.
Similar concerns were expressed by other experts, “Rising oil and gas prices in Europe are a big threat that is hurting our economy,” said Asad Rizvi, former Treasury Head-Chase Manhattan Bank, in a tweet post.
"Demand is due to unexpectedly fast-improving Covid conditions and consumers shifting to cheaper oil from expensive gas that is equivalent of $205 a barrel."
On Wednesday, US crude rose to its highest level since 2014 but pared gains and was last off 0.15% to $78.81 a barrel. Brent crude lost 0.07% to $82.46 per barrel, having hit a three-year high in the previous session.
Meanwhile, Abbas said SBP measures to arrest the rupee decline would take time to take effect.
The SBP has recently introduced a string of measures including the imposition of a 100% cash margin requirement on import of 114 items, taking the total number to 525, revision of its Prudential Regulations (PRs) for consumer financing to moderate import and demand growth, and reducing the retention period of export proceeds with Authorised Dealers upon realisation from five to three working days.
Abbas said resumption of talks with the International Monetary Fund (IMF) would provide much-needed clarity.
Open-market movement
In the open market, the PKR gained 10 paisas for buying while remaining unchanged for selling against USD, closing at 171.70 and 172.20, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 198 and 199.50, respectively.
Against UAE Dirham, the PKR remained unchanged for both buying and selling, closing at 47.80 and 48, respectively.
Against Saudi Riyal, the PKR gained 10 paisas for both buying and selling, closing at 45.40 and 45.60, respectively.
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Open Bid Rs 171.70
Open Offer Rs 172.20
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Interbank Closing Rates: Interbank Closing Rates For Dollar on Wednesday.
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Open Bid Rs 170.90
Open Offer Rs 171.00
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RUPEE IN LAHORE: The Pak rupee appreciated its worth versus major currencies including the greenback and the British pound in the open currency market on Wednesday.
Following a slight decrease in the buyers’ interest, the greenback marginally declined its value by 10 paisas and closed lower for buying and selling at Rs 171.80 and Rs 172.40 against the overnight closing rate of Rs 171.90 and Rs 172.50, respectively, local currency dealers said.
Likewise, the national currency also followed suit in relation to the pound sterling that was bought and sold at Rs 232.20 and Rs 234.40 against Tuesday’s closing trend of Rs 232.80 and Rs 234.80, respectively, they added.
RUPEE IN ISLAMABAD AND RAWALPINDI: The rupee recovered against the dollar at the open currency markets of Islamabad and Rawalpindi here on Wednesday.
The dollar opened at Rs 172(buying) and Rs 172.10(selling) against last rate of Rs 173.30 (buying) and Rs 173.40(selling).
It closed at Rs 172(buying) and Rs 172.10(selling).
The buying and selling rates of one tola of gold remained Rs. 109,700 (buying) and Rs109,500(selling).
Copyright Business Recorder, 2021
