KARACHI
Pakistani rupee inched down by three paisas against the US dollar in the interbank market on Monday.
According to the data released by the State Bank of Pakistan (SBP), the rupee opened at 278.33 against the greenback in the interbank market and closed at 278.36, going down by 0.01 percent.
The rupee lost 12 paisas against the US dollar in the interbank market last week. During the previous week, the rupee 0.04 percent against the US dollar. The local unit closed at 278.33, against 278.21 it had closed the week earlier against the greenback, according to the SBP.
The rupee managed to maintain stability against the mighty dollar in May in light of stable economic operations.
The rupee settled May at 278.33 per USD, reflecting a meager two paisa drop as compared to April’s closing rate of 278.31 per US dollar.
The successful conclusion of the 9-month stand-by agreement (SBA) with the International Monetary Fund (IMF) proved to be the primary catalyst for the persistent strengthening journey of the rupee.
In a related development, foreign exchange reserves held by the SBP decreased by $63 million on a weekly basis, clocking in at $9.09 billion as of May 24, data released on Thursday showed.
Total liquid foreign reserves held by the country stood at $14.31 billion. Net foreign reserves held by commercial banks stood at $5.22 billion.
The central bank cited external debt repayments as the reason for the decrease in the foreign currency reserves. Last week, Pakistan’s central bank reserves increased by $22 million.
Meanwhile, the Karachi Interbank Offered Rate (Kibor) dropped sharply on Thursday last following the treasury bills auction held on Wednesday last.
The benchmark 6-month Karachi Interbank Bid and Offer rates dropped by 18 basis points (bps) to 20.08 percent and 21.07 percent. The three-month Kibor saw the maximum decline of 25bps to 20.84 percent and 21.09 percent. The auction saw a fall in cutoff rates across all tenors, with the decline going as much as 60bps. The market has renewed its bets for a rate cut by the State Bank of Pakistan (SBP), which has maintained the policy rate at 22 percent since June 2023, ahead of the upcoming monetary policy meeting. The central bank is scheduled to meet on June 10 to announce its next decision.
