KARACHI: Snapping a four-day losing streak with a minimum possible gain, Pakistani rupee inched up by one paisa against the US dollar in the interbank market on Thursday.
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 294.93 against the dollar in the interbank market and closed at 294.92.
Earlier, the rupee depreciated by Rs7.47 against the US dollar during the preceding four sessions. During the current fiscal year 2023-24, Pakistani rupee has shed Rs8.93 against the US dollar in the interbank market, while it plummeted by Rs67.49 against the greenback in the current year.
However, the local unit depreciated against the greenback in the open market by Re1 (-0.33 percent). The rupee was quoted in the range of 301-304 against the dollar in the open market as compared to 300-303 a session earlier. In the black market/Hundi, the dollar was traded at Rs319 against Rs318 a session earlier.
According to currency experts, the demand for the dollar remained high as imports are opening up gradually. They said the rupee’s recent decline can be attributed to the removal of restrictions on letters of credit (LCs), which has led to an increased demand for dollars and subsequently weakened the rupee. They said that the price of oil going up in the international market could also be cited as a reason for the dollar price to spike. They also said that there is a shortage of greenbacks in the market.
They said the rupee’s depreciation was expected, as under the agreement with the International Monetary Fund (IMF), the difference between the open market and the interbank market should be one percent. They said that the open market was witnessing an upward trend, adding that this also had an effect on the interbank market.
They said that the caretaker set-up also had an effect on the dollar rate, as the outgoing government usually left difficult decisions to the former as it does not have a political stake. They expected that the rupee would remain under pressure, adding the government’s policies were in conflict with each other and called for undertaking structural reforms. – TLT