KARACHI :(Web desk)- The Pakistani rupee remained stable against the US dollar at Rs178.63 in the inter-bank market on Thursday.
According to the State Bank of Pakistan (SBP), the local currency dropped to an all-time low of Rs178.63 a day earlier after the central bank decided to hold the policy rate at 9.75% for the next six weeks.
During the trading session today, the local currency surpassed Rs179-mark and fell to Rs179.25 against the greenback as six-month Kibor reached a two-year high of 11.93%; however, it managed to recoup some of the losses by the end of the session.
Moreover, a continual surge in the dollar demand for import payments weighed down on the local unit. Inflows, which were available in the market, were not sufficient to cover the demand side.
“There was a mismatch between the demand and the supply of the greenback. The central bank refrained from intervening in the market to lend support to the currency,” a forex trader had said.
The rupee had maintained a downward trend for the past 10 months. It has lost 17.31% (or Rs26.36) to date, compared to the record high of Rs152.27 recorded in May 2021.
The Pakistani rupee has depreciated by 13.38% (or Rs21.09) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.
For the rupee, global oil prices trajectory and outlook for inflation and the current account deficit would be watched for cues.
Earlier, Arif Habib Limited Head of Research Tahir Abbas had said that currency is under pressure due to geopolitical uncertainty which is affecting commodity prices.
“Oil prices and commodity prices are rising and if they remain in the same range for the next four months Pakistan’s import bill will record an increase of around $4 billion,” he had said.
The analyst was of the view that the rupee’s movements are dependent on commodity prices in the international market.