Rupee strengthens further, settles at 285.15 against US dollar

ISLAMABAD: The Pakistani rupee strengthened further against the US dollar, appreciating 0.21% in the inter-bank market on Friday.
At close, the currency settled at 285.15, a gain of Re0.59, as per the State Bank of Pakistan (SBP). However, in the open market, the US dollar was being traded in the range of 308-311 level against the greenback, as the gap widened due to foreign currency shortage.

The increase comes after the rupee registered a significant gain to settle at 285.74 or 0.49% up against the US dollar in the inter-bank on Thursday. In a key development, the country’s total liquid foreign exchange reserves declined by another $206 million during the last week. According to a weekly report issued by the SBP on Thursday, total liquid foreign exchange reserves held by the country stood at $9.731 billion as of May 19, 2023, compared to $9.937 billion on May 12, 2023.

Separately, the Reforms & Revenue Mobilization Commission (RRMC) recommended that petrol stations across the country should not accept cash payments for fuel purchases. Internationally, the US dollar stood near a two-month high against its major peers on Friday and was headed for a third weekly gain on expectations that US interest rates could remain higher for longer than initially expected.

Jitters over debt ceiling negotiations between US President Joe Biden and top congressional Republican Kevin McCarthy also continued to cast a shadow over market sentiment, with just a week to go before the so-called “X-date” on June 1, when the government would be unable to cover its obligations. The US dollar index edged 0.05% lower to 104.18. Oil prices, a key indicator of currency parity, were stable on Friday, as the market weighed conflicting messages on supply from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting, a stronger US dollar and worries of weaker-than-expected demand growth.