Karachi: Rupee remained under pressure against dollar as currency depreciated 0.45 percent in inter-bank market on first trading day. At close, rupee settled at 297.13, decrease of Rs 1.35 as per State Bank of Pakistan.

This is its weakest closing level since May 11 and also precariously near all-time historic low against dollar in inter-bank market. During previous week, rupee saw substantial depreciation of 2.5 percent, closing at 295.78 against dollar.

However, its fall meant gap with open-market rates narrowed, which was earlier under scrutiny as International Monetary Fund has prescribed 1.25 percent difference in its country report after Stand-By Arrangement. Experts cited rupee decline to an increase in import payments, amid SBP’s decision to lift curbs on imports.  “Rupee is expected to remain under pressure and is likely to cross 300 level,” he added.

Globally, dollar began on firm footing following five straight weeks of gains as investors looked ahead to Federal Reserve’s Jackson Hole symposium for guide on where rates might settle when dust of this hiking cycle clears. Dollar made gain of 0.7 percent on euro last week, inched ahead on yen and surged by more than 1 percent on Antipodean currencies as US Treasury yields leapt in anticipation of interest rates staying higher for longer. Oil prices, key indicator of currency parity rose as global supply is tightening with lower exports from Saudi Arabia and Russia, offsetting nagging concerns about global demand growth amid high interest rates.

Published in The Daily National Courier, August, 22 2023

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