Rupee gives up gains, drops 0.11%
photo: file
Pakistani currency on Friday failed to sustain gains as it dropped by 0.11%, or Rs0.30, to Rs285.68 against the US dollar in the inter-bank market amid a persistent drop in the country’s foreign exchange reserves.
In the open market too, the currency fell 0.33%, or Re1, to Rs300 against the greenback, according to the Exchange Companies Association of Pakistan.
With the rupee depreciation, the price of gold surged 1.75%, or Rs4,000, to Rs233,000 per tola (11.66 grams).
The currency dipped in the backdrop of a decrease in foreign currency reserves for the fifth consecutive week. During the week ended May 26, 2023, the SBP’s reserves shrank $102 million to $4.09 billion due to external debt repayment.
On Thursday, however, the rupee recorded a dramatic recovery of Rs27 in the open market, according to the Forex Association of Pakistan.
Other currency dealers in the open market reported a recovery of around Rs12 to Rs299/$ after the central bank allowed commercial banks to buy US dollars from the inter-bank market to settle the international payments made through credit cards by their clients.
Earlier, banks were purchasing around $10 million a day from the open market to settle credit card payments.
Currency dealers have warned that the decision permitting banks to purchase dollars from the inter-bank market would pile pressure on the rupee, as the dollar was available at a comparatively cheaper rate of around Rs285 in inter-bank versus Rs312 in the open market.
Published in The Express Tribune, June 3rd, 2023.
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