Rupee dips to 10-day low at 277.95 vs dollar

Depreciates for 6th straight day ahead of $1b Eurobond payment

KARACHI:

Pakistani currency on Monday hit a 10-day low at Rs277.95 against the US dollar in the inter-bank market, maintaining its downtick for the sixth consecutive working day ahead of repayment of $1 billion for the maturing Eurobond next week.

Besides, gold continued to remain on its record-breaking spree, hitting a new record high at Rs245,700 per tola (11.66 grams) in line with the global trend.

With the fresh drop of Rs0.02, the rupee has cumulatively depreciated Rs0.92 in the past 11 days compared to a five-and-a-half-month high of Rs277.03/$ reached on March 28, 2024, according to the State Bank of Pakistan’s (SBP) data.

The currency is coming under modest pressure after appreciating 10.5%, or Rs29.15, over a period of seven months and reached Rs277.03/$ last week. The recovery came after the currency touched its all-time low at Rs307.10/$ in the first week of September 2023.

Market talk suggests that Pakistan’s foreign exchange reserves may slip close to $7 billion after the Eurobond repayment compared to the existing level of $8.04 billion.

The potential drop in the foreign exchange reserves will prove temporary, as the International Monetary Fund (IMF) executive board is set to meet in late April to give its final nod for the release of the last tranche of $1.1 billion to Pakistan. The country is expected to receive the installment in late April or early May, which will take the reserves above $8 billion once again.

In the open market, however, the rupee maintained its uptrend, rising Rs0.07 to close at Rs279.58/$, according to the Exchange Companies Association of Pakistan (ECAP).

The retail market has continued to see the recovery of the rupee since the central bank extended its deadline for currency dealers for the import of US dollars against export of other foreign currencies till the end of June 2024 from December 2023.

Meanwhile, with a fresh increase of Rs600, gold has cumulatively gained Rs5,500 in the past two working days to a record high at Rs245,700 per tola.

The All Pakistan Saraf Gems and Jewellers Association reported that the bullion rose in local markets after it hit a new all-time high in the international market at $2,355 per ounce (31.10 grams), up $5 for the day.

Published in The Express Tribune, April 9^th, 2024.

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