KARACHI: Pakistani rupee weakened against the US dollar in the interbank market by Rs1.67 (-0.60 percent) for the second successive session on Monday. The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 277.59 against the dollar in the interbank market and closed at 279.26. Similarly, the local unit depreciated against the greenback in the open market by Rs3 (-1.07 percent). The rupee was quoted in the range of 280-283 against the dollar in the open market as compared to 277-280 a session earlier. In the black market/Hundi, the dollar was quoted at Rs296 against Rs295 a session earlier. During the recently started fiscal year 2023-24, Pakistani rupee has gained Rs6.77 against the US dollar in the interbank market, while it plummeted by Rs51.83 against the greenback in the current year. The Pakistani rupee inched up by o.11 percent against the US dollar in the interbank market last week, while it remained unchanged in the open market. TLTP
The International Monetary Fund (IMF) transferred $1.2 billion to the central bank’s account on Thursday last after approving a $3 billion loan agreement for Pakistan on Wednesday last. Earlier last week, $1bn were transferred by the United Arab Emirates on Wednesday and $2bn by Saudi Arabia on Tuesday.
The IMF agreement resulted in Fitch Ratings upgrading Pakistan’s sovereign rating to ‘CCC’ from ‘CCC-’ on Monday last, providing some respite to investors in the nation’s stocks and bonds. Following the announcement of the Saudi help, Pakistan’s sovereign dollar bonds increased in value by as much as 1.8 cents, according to data from Tradeweb.
The SBP on Thursday last reported a 1.37 percent increase in foreign exchange reserves on a week-on-week basis. As of July 7, the SBP’s foreign currency reserves reached $4.5 billion, showing a $61 million rise compared to $4.4 billion on June 30, 2023. The inflows of $2 billion from Saudi Arabia, $1 billion from the United Arab Emirates and $1.2 billion from the IMF are expected to further enhance reserves by the week ending on July 14, 2023. Total liquid foreign currency reserves held by banks stood at $5.3 billion.
However, the rupee’s surge is predicted by some analysts to be temporary. Given that imports appear to be only partially open, the currency appears to trade range-bound in the short term. According to commentators, banks won’t open fresh letters of credit unless there are enough dollar inflows in the nation.
