Rupee Depreciates Against the US Dollar to Below 286 With No Recovery in Sight


After starting the day at 285 in the interbank market, the Pakistani rupee lost value versus the US dollar during intraday trade to mark the conclusion of the week.

At 11 AM, it became bearish, shedding 60 paisas versus the dollar and falling as low as 286.725.

Later, between 12:30 and 1:15 PM, it fell to the 287 level and stayed there before rising to the 286 level.

China has agreed to give Pakistan an additional two years to pay back its over $2 billion in publically guaranteed debt. This is a good outcome because it means that the present stock of foreign exchange reserves held by SBP will likely remain above $8.5 billion till the next report.

Relevantly, thanks to inflows from Saudi Arabia, the United Arab Emirates (UAE), and the International Monetary Fund (IMF), the central bank's foreign exchange reserves increased by over 90% weekly.


The SBP's foreign exchange holdings were valued at $8.727 billion on July 14, up $4.2 billion from $4.524 billion on July 7. The nation's total liquid foreign exchange holdings, which include net reserves held by banks other than the SBP, were at $14.065 billion, an increase of $4.227 billion over the previous week.

Unusual premiums, according to one trader, were distorting the illicit market more severely on Thursday.

"Market forces determine 90% of exchange rate regulations, and current trends indicate that the next PKR/USD defense line will be at 290, or in the worst case, 296. The local unit is also under pressure from volatility brought on by uncertainties and prevailing attitudes on the impending General Elections, he said. Advertisement