The Pakistani rupee registered slight gains against the US dollar in the open market for a second consecutive day on Thursday, recovering after hitting record lows against the greenback earlier this week.
The dollar decreased by 50 paisas from Rs 153 in the open market and was being traded at Rs 152.50. Meanwhile, in the interbank market, the greenback dipped by 50 paisas from Rs 151.95 and was traded at Rs 151.45.
On the other hand, the price of gold also dropped by Rs 400 to settle at Rs 70,900 per tola. The price of 10 grams of gold fell by Rs 343 to rest at Rs 60,785, according to the Sindh Sarafa (jewellery) Bazaar Association. In the international market, gold gained by $1 per ounce to rise to $1,277.
The rupee has been registering record lows against the US dollar in the wake of a $6 billion bailout agreement with the International Monetary Fund (IMF).
The IMF accord, which is yet to be approved by the international lender’s executive board, foresees a ‘market-determined’ rate for the rupee. The rupee – which many analysts consider overvalued – has been managed by the central bank in a de facto controlled float.
The State Bank of Pakistan, which lifted interest rates by 150 basis points on Monday to 12.25%, said it was watching the foreign exchange market closely and would act in the case of “unwarranted” volatility.
It said the recent slide “reflects the continuing resolution of accumulated imbalances of the past and some role of supply and demand factors”.
The sliding rupee has caused alarm in Pakistan, which is already facing inflation likely to average over 7% for the year and surging costs for fuel and power, which are both heavily influenced by the dollar exchange rate.