The appreciation run of Pakistan’s rupee came to an end on Thursday, as the currency fell 0.52% against the US dollar, closing over the 174 level in the inter-bank market.

As per the State Bank of Pakistan (SBP), the PKR closed at 174.67 against the USD after a day-on-day depreciation of Rs0.91 or 0.52%. The decline comes after the rupee appreciated 0.65% or Rs1.13 against the dollar on Wednesday, which was its third successive gain.

Last week on Friday, the PKR had depreciated to its lowest level of 175.73 against the USD in the inter-bank market.

Meanwhile, the market is bracing itself for a rate-hike in the upcoming monetary policy announcement, which was preponed to Friday.

The Monetary Policy Committee (MPC) meeting was originally scheduled to be held on November 26.

“We expect the SBP to remain hawkish, raising its policy rate for the second time since the beginning of FY22 and at a much higher magnitude of 100bps, taking the total cumulative increase in FY22TD to 125bps. With this, the revised policy rate is expected at 8.25%,” said Arif Habib Limited (AHL) in its report.

Inflationary and balance-of-payments concerns along with uncertainty over the International Monetary Fund (IMF) announcement have already kept the rupee under pressure for a number of weeks. While foreign exchange reserves have risen, that has done little to stop the rupee decline. Foreign Direct Investment (FDI) has also continued to post negative growth and declined 12 percent during the first four months of this fiscal year (FY22).

Inter-bank market rates for dollar on Thursday

BID Rs 174.70

OFFER Rs 174.80

Open-market movement

In the open market, the PKR lost 20 paisas for both buying and selling against USD, closing at 175 and 176, respectively.

Against Euro, the PKR lost 1.50 rupees for buying and 1.10 rupees for selling, closing at 198.50 and 200, respectively.

Against UAE Dirham, the PKR lost 20 paisas for buying and 25 paisas for selling, closing at 49.20 and 49.70, respectively.

Against Saudi Riyal, the PKR lost 50 paisas for buying and 45 paisas for selling, closing at 46.30 and 46.60, respectively.

Open-market rates for dollar on Thursday

BID Rs 175

OFFER Rs 176

This article was first published on Nov 18 2021 in Business Recorder.