Pakistan rupee continued to register losses for the fourth straight session against the US dollar, depreciating 0.56% in the inter-bank market on Thursday.
As per the State Bank of Pakistan (SBP), the rupee closed at 186.97 after a day-on-day depreciation of Rs1.05, or 0.56%. During the last four trading sessions, the currency has lost Rs5.42 or 2.9% of its value.
The loss has come at the heels of a change in government that first saw the rupee plummet to 188, before recovering to around 181.5. However, the gain was short-lived as the rupee is nearing its historic low once again.
The local currency has now depreciated over 17% against the dollar since achieving its most-recent high on May 14, 2021, and by over 14% during the ongoing fiscal year.
Oil price, a major determinant of currency parity, also rose on Thursday amid concerns about supply as the European Union (EU) mulls a potential ban on Russian oil imports, days after diminished supplies from Libya rocked the market.
Brent crude futures rose $1.11, or 1%, to $107.91 a barrel, while, U.S. West Texas Intermediate (WTI) crude futures gained 87 cents, or 0.9%, to 103.06 a barrel.
The rupee has also been under pressure over the International Monetary Fund (IMF) programme, seen widely as crucial to bringing stability to Pakistan’s markets. Islamabad is currently in talks with the IMF for revival of its $6-billion Extended Fund Facility (EFF), a programme that was put on hold with the change in government.
Newly-appointed Finance Minister Miftah Ismail left for Washington DC early on Thursday to hold talks with the lender. The development comes after the federal cabinet on Wednesday granted approval to remove Miftah Ismail’s name from the Exit Control List (ECL).
“The market is expecting a revival of the IMF programme after the government expressed its intention to get rid of the oil and electricity subsidy announced by its predecessor,” Fahad Rauf, Head of Research at Ismail Iqbal Securities, told Business Recorder.
“Together with rollover of Chinese loans, the currency market should become stable. Unexpected inflows from friendly countries like Saudi Arabia could also appreciate the local currency.”
Miftah, prior to his departure to Washington DC, had said that the IMF has sought an increase in the prices of petroleum products as well as taxes on levy, withdrawal of industrial amnesty scheme, reducing circular debt, increasing electricity tariffs, and fiscal saving from the present government for revival of the EFF.
Inter-bank market rates for dollar on Thursday
BID Rs 186.80
OFFER Rs 186.90
In the open market, the PKR lost 75 paisas for buying and 50 paisas for selling against USD, closing at 187 and 188, respectively.
Against Euro, the PKR lost 1.50 rupees for both buying and selling, closing at 202 and 204, respectively.
Against UAE Dirham, the PKR lost 30 paisas for buying and 20 paisas for selling, closing at 50.60 and 51, respectively.
Against Saudi Riyal, the PKR lost 30 paisas for buying while remaining unchanged for selling, closing at 49.60 and 49.80, respectively.
Open-market rates for dollar on Thursday
BID Rs 187
OFFER Rs 188