Against USD: Pakistan’s rupee recovers marginally after $3bn Saudi fund deposit

Pakistan’s rupee finally ended its three-day depreciation run as it recorded marginal improvement against the US dollar, appreciating 0.16% in the inter-bank market on Monday, following the $3 billion fund deposit from Saudi Arabia.

As per the State Bank of Pakistan (SBP), the PKR closed at 176.48 against the USD after a day-on-day appreciation of 29 paisas or 0.16%. On Friday, PKR closed at a record low of 176.77 against the USD.

 

The appreciation albeit marginal comes after the SBP on Saturday received $3 billion Saudi deposit to support the country’s foreign currency reserves and to also contribute to resolving the adverse effects of the Covid-19 pandemic.

“The appreciation is very minute, as rupee was at one stage looking to close at 175,” Fahad Rauf, Head of Research at Ismail Iqbal Securities, told PEN.

The analyst was of the view that the marginal improvement in PKR is a negative, as it shows that the market has not taken any impact of the multi-billion-dollar Saudi fund deposit.

“There are concerns on the external front,” said Rauf, while adding that improvements are required on the current account side.

The country’s trade deficit widened by 133.99% on a year-on-year basis and stood at $4.963 billion in November 2021 compared to $2.121 billion in November 2020. Imports witnessed 82.83% growth on a year-on-year basis in November 2021 and stood at $7.847 billion compared to $4.292 billion in November 2020.

Rauf said the decline in commodity rates would bring stability to the exchange rate. “In the short-term, rupee is expected to remain around 175, and the securing of $1-billion funds from the International Monetary Fund (IMF) would push PKR to 170,” Rauf added.

Inter-bank market rates for dollar on Monday

BID Rs176.48

OFFER Rs 176.58

Open-market movement

In the open market, PKR gained one rupee for both buying and selling against USD, closing at 178 and 178.50, respectively.

Against Euro, PKR gained 50 paisas for both buying and selling, closing at 198.50 and 200, respectively.

Against UAE Dirham, PKR gained 10 paisas for buying while remaining unchanged for selling, closing at 49.30 and 49.80, respectively.

Against Saudi Riyal, PKR lost 10 paisas for both buying and selling, closing at 46.80 and 47.20, respectively.

Open-market rates for dollar on Monday

BID Rs 178

OFFER Rs 178.50