Rupee depreciates to 164.89 against dollar

Currency falls below 165 in intra-day trade before recovering

KARACHI: The Pakistani currency on Tuesday depreciated beyond the much-anticipated level of Rs165 against the US dollar in the inter-bank market during intra-day trading but recovered partially to close at a new seven-week low of Rs164.89.

During the day, the rupee hit a low of Rs165.5, dropping Rs1.42 compared to Monday’s close of Rs164.08. It was the fourth consecutive trading session that saw the depreciation of the rupee.

The rupee lost ground due to increase in the demand for dollar after PM Imran Khan eased lockdown on Monday. Late on Monday, the government allowed more sectors of the economy to return to work from Tuesday.

A couple of months ago, a few research houses anticipated that the rupee would trade between Rs165 and Rs170 by the end of June, considering a surge in the demand for dollar and drop in supply.

The rupee has cumulatively depreciated Rs3.97 or 2.46% in the last four trading sessions (May 28 to June 2).

Earlier, the currency had recovered to Rs159.65 against the US dollar by May 5. A currency dealer at Wall Street Exchange Company in Karachi said he sold the dollar at Rs166 and bought at Rs162 in the open market. The wide spread shows the growing gap between demand and supply of dollar.

“However, there are no buyers of the US dollar and other major foreign currencies nor are there any sellers on public dealing counters,” the dealer said. 

Published in The Express Tribune, June 3^rd, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.