Since July 28, Rupee has begun to depreciate against the US dollar for the first time, falling by Rs1.01 in the inter-bank market on Wednesday.
At around 1:00pm, the rupee was being quoted at 214.91, a depreciation of Rs1.01 or 0.46% against the greenback, during intra-day trading.
On Tuesday, the rupee registered a marginal gain against the US dollar, settling at 213.90, an appreciation of 0.04% or Re0.08, against the greenback in the inter-bank market. Despite the smaller amount of the gain, the rupee managed to rise for the 11th consecutive day.
Pakistani Rupee has faced continuous depreciation for months which caused major problems for the economy. Meanwhile, the State Bank of Pakistan (SBP) allowed Exchange Companies to export US dollar on consignment basis.
However, according to SBP guidelines, ECs must deposit export revenues in their USD accounts with Pakistani banks within three days.
Malik Bostan, Chairman of the Exchange Companies Association of Pakistan (ECAP), praised the central bank’s action, saying it will assist in lower spreads in the interbank and expand currency markets.
According to data released by the State Bank of Pakistan (SBP) on Tuesday, inflows amounting to $2.523 billion arrived during July 2022 compared to $2.761 billion in June, a decrease of $238 million or 8.6% on a month-on-month basis.
On a year-on-year (YoY) basis, a decline of around 8 percent was witnessed in July 2022. Remittances stood at $2.74 billion in July 2021.
However, it has also been said by some analysts that this market sentiment is a consequence of anticipation by the market about delay in the disbursement of funds from the International Monetary Fund (IMF).