Karachi: Rupee reached new record low against dollar, as it settled at 302 in inter-bank market. At close, domestic unit was down Re 1 or 0.33 percent as per State Bank of Pakistan.

Currency fell 1.7 percent against greenback, but gap with rates in open market continued to stay over prescribed limit by International Monetary Fund, raising concerns over further fall in inter-bank market. Pakistan’s rising imports as restrictions ease and falling foreign exchange reserves with no inflows in sight are keeping pressure on rupee. In related development, the SBP said it cannot impose ban on import of any item as it falls under domain of Ministry of Commerce. Globally, dollar eased from 12-week peak on Monday as traders weighed US monetary path after Fed Chair Jerome Powell left open possibility of further interest rate increases, while yen hovered close to its lowest in over nine months. In an eagerly awaited speech at annual Jackson Hole Economic Policy Symposium, Federal Reserve Chair Powell promised to move with care at upcoming meetings as he noted both progress made on easing price pressures as well as risks from surprising strength of US economy.

Oil prices, key indicator of currency parity, ticked higher on Monday after China took steps to support its flagging economy, though investors remained worried about pace of growth as well as further US interest rate hikes that could dampen fuel demand.

Published in The Daily National Courier, August, 29 2023

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