Rupee hits 1-month low on high dollar demand

The Pakistani rupee has faced a downward spiral for the fifth consecutive working day, falling by 0.58%, or Rs1.66, to reach a one-month low at Rs286.81 against the US dollar in the interbank market on Friday.

Over the past five days, the currency has cumulatively lost 3.60, or Rs10.34, according to data from the central bank.

In the open market, the rupee also depreciated by 0.5%, or Rs1.50, trading at Rs291/$ compared to Rs289.50 a day ago. As a result, the exchange rate spread between the interbank and open markets settled within the IMF directed level of 1.25%, currently around Rs4.

SBP injects funds

To address the liquidity crunch at banks, the SBP injected Rs1.19 trillion through open market operations for a relatively longer period of 77 days. Commercial and Shariah-compliant banks received these funds at a rate of return of 22.15% and 22.37%, respectively.

Gold shines

The gold pricing body announced a price increase of Rs1,800 per tola (11.66 grams) to Rs222,900 in Pakistan, mainly due to rupee depreciation on Friday. Despite the international market showing a drop of $12 per ounce (31.10 grams) to $1,966, the local price was revised upwards.

Published in The Express Tribune, July 22^nd, 2023.

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