Re nears 177 against dollar after three-day depreciation

KARACHI: Pakistani rupee weakened against the US dollar for the third straight day, shedding 26 paisas (-0.15 percent) on Wednesday.
The State Bank of Pakistan said in a statement that the dollar opened at Rs176.72 in the interbank market and closed at Rs176.98. The rupee witnessed a trading range of 28 paisas during the session, showing the intraday high bid of 177 and low offer of 176.75. Within the open market, the rupee was traded at 178/179 per dollar.
Overall Pakistan rupee shed 74 paisas against the US dollar during the last three days, while it has depreciated by 47 paisas during the current year 2022. The local unit has depreciated by Rs19.55 during the ongoing fiscal year 2021-22.
The rupee struggled due to uncertainty over the sixth review of the International Monetary Fund (IMF) for the $6 billion extended fund facility (EFF) programme. Investors remained on the sidelines after the IMF website, which lists its executive board calendar, showed Pakistan’s discussion would be taken up on February 2 instead of January 28.
The currency experts said that the decline in the local unit came on the back of increased demand from the importers and a lack of sufficient supplies coupled with a delay in IMF review. They said that approval of the State Bank of Pakistan (Amendment) Bill 2021 from the Senate will be a key step and if the bill is passed, it will ensure clearance of Pakistan’s sixth review by the IMF’s executive board. The Senate Committee on Finance will discuss the bill on Thursday.
They opined that the US dollar may face depreciation in the coming days if all goes well with regards to the IMF programme revival. They said the greenback is overvalued against the local currency. They said that commodity prices in the international market may decline in the coming months, which will cut Pakistan’s import bill and ease off the pressure on the rupee.
Earlier this week, the Monetary Policy Committee (MPC) of the central bank in its meeting decided to keep the policy rate unchanged at 9.75 percent till March in line with the forward guidance provided in the last monetary policy statement. – TLTP