Pakistan’s rupee continued to decline further against the US dollar, depreciating 0.06% in the inter-bank market to record yet another historic low on Friday.
As per the State Bank of Pakistan (SBP), the PKR closed at 177.71 against the USD after a day-on-day depreciation of 10 paisas or 0.06%. On Thursday, PKR closed at the then-record low of 177.61 against the USD.
The rupee has depreciated by 11.18% CYTD and 12.8% on FYTD basis against US dollar.
“The entire market has set their sights on the upcoming Monetary Policy Committee (MPC) meeting of the central bank,” Saad Hashmey, Executive Director BMA Capital told Business Recorder.
Against USD: Pakistan’s rupee hits new low
The analyst said that the market anticipates a policy rate hike to the tune of 100-200 bps in the upcoming MPC.
“If the rate hike is of 100 bps, the market has already incorporated the impact. However, a rate hike of over 100 bps would have a negative impact on the market,” Hashmey said.
The SBP’s MPC is scheduled to meet on December 14 and comes only 24 days after the previous meeting. Last month, SBP hiked the interest rate by 150 basis points, taking it to 8.75% as it announced the monetary policy.
Hashmey further said that the dollar would stabilize when the government implement measures to curb imports. “The government needs to tighten its screws to resolve energy sector issues, curb imports and increase the tax revenue,” Hashmey said.
“PKR will reflect the pace of policy measures implemented by the government,” he added.
Against USD: Pakistan’s rupee weakens to record level
The analyst said that the International Monetary Fund (IMF) also needs to get on board, saying that this would act as a “seal of approval from other international lenders including World Bank and Asian Development Bank” to meet external funding gap.
Meanwhile, Pakistan’s foreign exchange reserves witnessed significant gains last week amid multi-billion-dollar deposits received from Saudi Arabia.
As per SBP’s weekly report issued on Friday, total liquid foreign exchange reserves held by the country stood at $25.150 billion on December 03, 2021. During the week under review, the SBP’s reserves increased by $2,647.9 million to $ 18.66 billion.
Inter-bank market rates for dollar on Friday
BID Rs 177.71
OFFER Rs 177.81
In the open market, PKR gained 10 paisas for buying and 40 paisas for selling against USD, closing at 178.90 and 179.90, respectively.
Against Euro, PKR gained 70 paisas for buying and 80 paisas for selling, closing at 199.80 and 201.70, respectively.
Against UAE Dirham, PKR lost 19 paisas for buying while remaining unchanged for selling, closing at 49.60 and 49.90, respectively.
Against Saudi Riyal, PKR lost 15 paisas for buying while remaining unchanged for selling, closing at 47.25 and 47.55, respectively.
Open-market rates for dollar on Friday
BID Rs 178.90
OFFER Rs 179.90Business Recorder
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