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Rupee weakens ahead of central bank rate decision

394326 041049 updates

Image showing Pakistani currency notes and coins— AFP/File
Image showing Pakistani currency notes and coins— AFP/File
  • The rupee stands at 176.49 against the US dollar in the interbank market.
  • Demand for local currency from importers was higher compared to the supplies from the exporters.
  • “We anticipate the local unit to remain stable in the coming days,” a currency dealer says.

KARACHI: The Pakistani rupee lost 0.15% against the US dollar on Thursday ahead of a central bank rate-setting meeting scheduled on Monday, where the bank is expected to maintain a status quo.

The rupee stood at 176.49 against the US dollar in the interbank market, weakening from Wednesday’s close of 176.22.

A currency dealer said that the demand for local currency from importers was higher while the supplies from the exporters were not enough, which weakened the rupee during the session.

“We anticipate the local unit to remain stable in the coming days due to some positive developments on the economic front,” he added.

With a fresh decline of 0.15%, the rupee has depreciated by 12.02% (or Rs18.95) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

The rupee has maintained the downtrend for the past eight months. It has lost 15.90% (or Rs24.22) to date, compared to the 22-month high of Rs152.27 recorded in May 2021.

Investors kept a close eye on the International Monetary Fund (IMF)’s executive board meeting scheduled to be held on January 28 to consider Pakistan’s request for the completion of the sixth review and release of $1 billion under tranche under Extended Fund Facility.

Moreover, the government is likely to issue a seven-year dollar-denominated Sukuk in international debt markets soon which is expected to affect the rupee-dollar parity.

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Earlier this week, Moody’s Investor Service assigned a B3 backed senior unsecured rating to the proposed US dollar-denominated Sukuk issuance by the government.

Analysts believe these developments could be a positive trigger for the local currency in days to come.

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