ISLAMABAD: After a minimal depreciation of about 25 paisa during the last three days, the Pakistani rupee observed another slight depreciation of 04 paisa (0.01%) against the US dollar in the inter-bank market on Thursday to settle at Rs278.44, against the previous day closure of Rs278.40, reported by State Bank of Pakistan (SBP).
This is the fourth consecutive session, the local unit observed a slight depreciation. Reports circulating in the media predicted that there might be further depreciation of the local currency after Pakistan entered into a new agreement with the IMF.
However, in an interview with Bloomberg, Pakistan’s finance minister Aurangzeb said that “there’d be no reason for the Pakistani currency to depreciate more than the range of about 6% to 8% seen in a typical year”.
Meanwhile, the American dollar on the international front has also taken some strength for the last couple of days, after the recent news over no intention of the cut on interest rates in the coming few months being signaled from Federal Reserve officials. The development pushed the US dollar up against other international currencies.
Pakistani Rupee Against Other Currencies
Like the greenback, the price of the Euro also went up by Rs1.63 to settle at Rs297.48 as compared to Rs295.85 on the last day, according to SBP.
However, the Japanese Yen remained constant at Rs1.80, while the British Pound observed a decline of 57 paisa to settle at Rs347.34 against the last closing of Rs346.77.
The price of the Emirates Dirham and the Saudi Riyal went up by 01 paisa each to close at Rs75.81 and Rs74.22 respectively.
Pakistani Rupee Against American Dollar
The Pakistani Currency swung both ways against the greenback during the last couple of months with recent continued appreciation except for the last four days. From September, till the middle of October 2023, the local unit observed appreciation for a record 28 consecutive sessions against the American dollar, followed by a continues decline for 17th consecutive sessions from October till the middle of November 2023.
However at the end of December 2023, and then in January 2024, the local unit mostly enjoyed appreciation against the US dollar, thanks to the inflow from the IMF (International Monetary Fund) in the form of Rs700m followed by a $2b roll over from the UAE on January 20. In addition, on 29th February, China also rolled over $2b to Pakistan which was due in March 2024. As a result, the Pakistani currency appreciated by over Rs 7 in the interbank during the last five to six weeks.
In another major development On 20th March (Wednesday) Pakistan and the IMF reached a staff-level agreement over the final review of the $3 billion Standby-By Agreement, adding some relief for boosting the local currency and the country’s economy. However, the nation must be ready for further hikes in prices and inflation in the country as the new IMF agreement is likely to be conditioned with further taxation.
In addition, Pakistan’s Finance Minister is already in Washington as part of the negotiation for a new multi-billion-dollar programme with the International Monetary Fund (IMF).
