Daily Times

The rupee edged lower against the US dollar in the inter-bank market on Monday and depreciated by five paisas. The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 279.59 against the dollar in the interbank market and closed at 279.64, depreciating by 0.02 percent. Out of the last 33 sessions, the rupee has lowered in three sessions, surged in 29 sessions while it remained unchanged in one session. Overall, the local unit improved by Rs0.31 against the greenback last week while it gained Rs7.44 during the previous 11 weeks, which it closed on a positive note. The rupee improved by Rs8.65 during the current fiscal year 2023-24 and Rs2.22 in the current year. The rupee gained Rs3.31 against the US dollar in December, while it shed Rs3.69 against the US dollar in November after gaining Rs6.26 (+2.23 percent) against the greenback in the month of October. The currency surged more than 6 percent in September.

On the other hand, the local unit depreciated by 50 paisas against the greenback in the open market. The rupee was quoted at 279.5 for buying and 281.5 for selling against 279 for buying and 281 for selling a session earlier, according to data provided by different exchange companies. The rupee surged by 50 paisas against the greenback last week. The rupee has gained Rs2 against the greenback in the previous five weeks while it gained Rs3.50 in December. Market talk suggests that the rupee will remain stable around current levels until the general elections scheduled for February 8, 2024. The rupee-dollar exchange rate will take cue for future direction from the new government’s economic policies. According to market people, the next monetary policy, to be unveiled by SBP on Monday (January 29), may also provide a clear direction to the rupee in the short term. They are anxiously awaiting the central bank’s decision to see whether it leaves the policy rate unchanged at the record high of 22 percent or makes a reduction.

The six-month Karachi interbank offered rate (KIBOR), a benchmark for lending and borrowing in Pakistan, fell to its lowest level in a year on Thursday, following an unexpected drop in treasury bill yields at an auction on Wednesday. The KIBOR, which reflects the cost of funds in the interbank market, eased to 20.62 percent from 20.82 percent. It had peaked at 24.71 percent in September 2023. The decline in the KIBOR came after the government raised Rs184 billion from the sale of treasury bills, less than its target of Rs225 billion. The cut-off yields for the three-month, six-month and one-year bills fell by 50 to 62 basis points, indicating lower borrowing costs for the government.