RECORDER REPORT
KARACHI: Pakistan's rupee continued to fall against the US dollar, weakening to its lowest closing level of over 178 for the first time in the inter-bank market on Friday.
As per the State Bank of Pakistan (SBP), the PKR closed at 178.04 against the USD after a day-on-day depreciation of 6 paisas or 0.03%. This is the weakest closing for the rupee against the US dollar in the inter-bank market.
On Thursday, the PKR had closed at the then-record low of 177.98 against the USD.
Cumulatively, the rupee has depreciated over 11% CYTD and 13% on a FYTD basis against the US dollar.
“The key cause behind pressure on the rupee has been a widening of the current account,” said SBP Governor Dr Reza Baqir earlier on Friday.
“Some part of the current account weakening is not in our control, such as the global commodity prices but with a number of central banks around the world now beginning to tighten, we are hoping that there will be some easing on global commodity prices,” added the central bank chief.
Pakistan’s trade deficit widened by 111.74% to $20.590 billion during the first five months (July-November) of the current fiscal year 2021-22 as compared to $9.724 billion during the same period of 2020-21.
Inflation rate has already hit 11.5%, prompting the central bank to raise interest rates by another 100 basis points, taking it to 9.75%.
Meanwhile, the SBP invited quotes for Open Market Operations (OMO) in two tenors i.e. i) 07-Day maturity (24-Dec-21) and ii) 63-day maturity (18-Feb-22), informed Ismail Iqbal Securities.
“This would signal the market that the SBP is willing to accept the fixed cost for 2 months, which means policy rates would remain unchanged in the near term,” said Fahad Rauf, Head of Research at Ismail Iqbal Securities.
“This action has likely come in reaction to higher yields in the recent T-bill auction, which the SBP termed as unwarranted in its recent policy statement,” said Rauf.
Results indicated a rate of 9.82% for a seven-day injection, while 9.90% for a 63-day injection.
Meanwhile, Pakistan’s foreign exchange reserves also fell by $89.9 million to $18,568 million.
“The drop confirms payment exceeds receivables,” Asad Rizvi, Ex-Treasury Head of Chase Manhattan, tweeted.
He said that “this is not a very encouraging sign as demand for USD is pushing PKR close to all-time lows,” adding that funding from the International Monetary Fund (IMF) will not be available till January, as demand for USD persists.
Open-market movement
In the open market, the PKR lost 1.60 rupees for both buying and selling against USD, closing at 180.50 and 181.50, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 201 and 202.50, respectively.
Against UAE Dirham, the PKR lost 10 paisas for both buying and selling, closing at 50.10 and 50.50, respectively.
Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling, closing at 47.40 and 47.85, respectively.
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Open Bid Rs 180.50
Open Offer Rs 181.50
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Interbank Closing Rates: Interbank Closing Rates For Dollar on Friday.
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Open Bid Rs 178.00
Open Offer Rs 178.10
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RUPEE IN LAHORE: The Pak rupee-greenback parity stayed unchanged amid sluggish trading activity in the local currency market on Friday.
According to the local currency dealers, the greenback did not witness any change in its demand and supply situation throughout the trading session as it firmly closed at its overnight closing trend for buying and selling at Rs 181.10 and Rs 182.00, respectively.
Likewise, the rupee also stayed unchanged against the pound sterling and was bought and sold at its previous closing trend for buying and selling at Rs 235.60 and Rs 237.00, respectively, they added.
RUPEE IN ISLAMABAD AND RAWALPINDI: The dollar showed further improvement against the Pak rupee at the open currency markets of Islamabad and Rawalpindi here on Friday.
The dollar resumed trading at Rs 181.80(buying) and Rs 181.90(selling) against the last rate of Rs 181.40(buying) and Rs 181.50(selling).
It closed at Rs 181.80(buying) and Rs 181.90(selling).
The buying and selling rates of one tola of gold was Rs 119,000(buying) and Rs 119,500(selling).
Copyright Business Recorder, 2021
