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Pakistani rupee increases against US dollar in interbank, open market

KARACHI: The rupee registered profit in the open markets and interbank against the US dollar on Friday for a third consecutive day, as the Pakistani currency slowly recovered earlier this week after hitting record lows against the greenback.

In the interbank market, US dollar was down Rs0.53 to close the day at Rs150.91. Whereas, the greenback shed Rs0.80 was being traded at Rs151.70 by the close of the day in the open market.

The gold price also decreased by Rs500 to Rs70,400 per tola (11.33 grams).

Following the announcement of a $6 billion bailout agreement with the International Monetary Fund, the rupee had been registering record decrease against the US dollar earlier in the week.

The IMF accord, which is still delaying final approval by the Fund, sees a ‘market-determined’ rate for the rupee. The rupee is considered overvalued and was previously managed in a de facto controlled float by the central bank.

The interest rates were lifted by State Bank of Pakistan by 150 basis points on Monday to 12.25% and they said that it would act in the case of “unwarranted volatility” and also that it was watching the foreign exchange market closely. It said the recent slide “reflects the continuing resolution of accumulated imbalances of the past and some role of supply and demand factors”.

The alarm has been caused in Pakistan due to the sliding rupee, which is already facing inflation likely to average over 7% for the year and surging costs for power and fuel—both heavily influenced by the dollar exchange rate.

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