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KARACHI: The rupee appreciated against the US dollar on Monday after Pakistan finally reached a staff-level agreement with the International Monetary Fund (IMF), registering a 0.27% increase to close below 175 in the inter-bank market.
As per the State Bank of Pakistan (SBP), the PKR closed at 174.77 against the USD after a day-on-day depreciation of Rs0.47 or 0.27%. The fall comes after the rupee neared its all-time low and ended at 175.24 against the dollar on Friday.
The currency market finally got the much-needed clarity after the IMF announced that it has reached a staff-level agreement with Pakistan authorities on revival of its Extended Fund Facility (EFF) programme.
“The rupee is likely to remain stable at this level, or may appreciate another 4-5%,” Saad Hashemy, Executive Director BMA Capital, told Business Recorder, adding that the Real Effective Exchange Rate (REER) is expected to drop further.
Furthermore, the announcement of IMF would pave way for other international lenders such as the World Bank, Asian Development Bank (ADB) to provide funds to Pakistan, “which will counter reserve depletion”, said Hashemy.
He was of the view that the SBP's latest measure to increase the policy rate by 150 basis points, which took it to 8.75% in its latest MPC meeting, would lead to import tightening. "This could curtail the growing Current Account Deficit (CAD)."
Meanwhile, another market analyst told Business Recorder that the appreciation of PKR may not continue for a long term, amid inconsistent inflows of dollars. They said that the CAD is rising, which remains a concern.
Pakistan's CAD jumped 47% YoY, swelling to $1.66 billion in October. During 4MFY22, the current account posted a deficit of $5,084 million, as compared to a surplus of $1,313 million in the same period of the previous fiscal year.
However, they confirmed that Pakistan will receive $3 billion in coming days, which would be deposited with the central bank.
“This would reduce pressure on the exchange rate, which could push PKR to 170 as well, but it will be short term.”
Open-market movement
In the open market, the PKR gained 10 paisas for both buying and selling against USD, closing at 175.90 and 176.90, respectively.
Against Euro, the PKR lost one rupee for both buying and selling, closing at 198 and 199.50, respectively.
Against UAE Dirham, the PKR lost 50 paisas for both buying and selling, closing at 49.80 and 50.30, respectively.
Against Saudi Riyal, the PKR remained unchanged for buying while losing 15 paisas for selling, closing at 46.40 and 46.85, respectively.
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Open Bid Rs 175.90
Open Offer Rs 176.90
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Interbank Closing Rates: Interbank Closing Rates For Dollar on Monday.
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Open Bid Rs 174.65
Open Offer Rs 174.75
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RUPEE IN LAHORE: The Pak rupee appreciated its worth on the buying side while it stayed unchanged on the selling side in relation to the greenback in the local currency market on Monday.
According to the local currency dealers, the greenback lost 40 paisas for buying and closed at Rs 175.60 against the previous closing rate of 176.00 whereas it did not witness any change for selling and firmly closed at Rs 177.00.
Moreover, the rupee showed strength as it recovered its earlier losses versus the pound sterling. As a result, the pound’s buying and selling rates declined from Friday’s closing of Rs 234.10 and Rs 236.00 to Rs 233.50 and Rs 235.00, respectively, they added.
Copyright Business Recorder, 2021
