Rupee further devalues against US dollar, KSE-100 gains 372 points
The rupee was being trading at Rs157.25 in the open market and at Rs156.98 in the interbank.
KARACHI (Dunya News) – The value of the US dollar on Thursday further rose by 25 paisa in the open market and 2 paisa in the interbank against Pakistani rupee.
Subsequently, the rupee was being trading at Rs157.25 in the open market and at Rs156.98 in the interbank.
On the other hand, Pakistan Stock Exchange (PSX) KSE-100 index has gained 372 points, and crossed the 35,000 level at early trade on Thursday.
It is anticipated that somber mood of investors prevented the index from notching up hefty gains.
The opposition’s threat to stop the passage of federal budget 2019-20 in the National Assembly kept the benchmark index under check.
Among other factors, a lack of positive triggers prevented investors from making fresh buying.
Economists, amid the widespread speculations about the currency’s free-float in the market, fear that the rate of the greenback may rise further.
Two days ago, after continuous devaluation for seven consecutive previous days, the rupee recovered its strength by 50 paisa in the open market and 30 paisa in the inter-bank market.
A couple of days ago, State Bank of Pakistan (SBP) Governor Reza Baqir held a press conference, and took businessmen and investors into confidence that Pakistan had accepted all conditions of the International Monetary Fund (IMF), and expressed hope that the global moneylender would approve the bailout to Pakistan on July 3.
Furthermore, following the approval, other international financial institutions are also likely to extend financial assistance to Pakistan, which in consequence would result in high inflows of the greenback.
The volatility in the currency market had subsided in the days prior to Eid-ul-Fitr amid high inflows during the festive season.
According to economists, Pakistan’s monthly average imports are around $4 billion, while exports are only $1.7 billion. The remittances help recover the fiscal deficit to some extent, but the demand of the greenback remains high due to payments of the state’s loan.
In the previous week, Pakistani rupee was depreciated by 4.9 percent against the US dollar as the greenback gained Rs7.25 and touched another historical high.
In the interbank market, the US dollar closed at Rs155.85 on Friday, which in consequence had raised Pakistan’s external debts by Rs725 billion. In the open market, the US dollar closed at Rs157.50, which in turn increased prices of goods, and hardships for the general public.
The interbank rate is the benchmark rate to determine the value of dollar and sets the direction for open market rates.
Since open market or cash market rate usually remains higher than the interbank rate, the open market is likely to follow a similar trend.
