Rupee undergoes downward correction against US dollar

• Rupee closes day at Rs174.89 against the US dollar.
• Analyst says rupee is in "correction mode".
• Pakistani rupee has depreciated by 11.01% since July 1, 2021.

KARACHI: The rupee continued to register marginal losses against the US dollar on Wednesday amid a slight uptick in greenback demand from importers.

According to the State Bank of Pakistan (SBP), the rupee closed at Rs174.89 against the US dollar in the interbank market.

Speaking to Geo.tv, Pakistan-Kuwait Investment Company's Head of Research and Development Samiullah Tariq said: “Pakistani rupee appreciated significantly due to IMF agreement, better trade numbers and Sukuk inflow.”

It is pertinent to mention here that the local currency had been on a winning streak following the International Monetary Fund's (IMF) approval for its sixth review of the $6 billion programme.

With the fresh decrease of 0.22%, the Pakistani rupee has depreciated by 11.01% (or Rs17.35) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

The rupee had maintained a downward trend for the past nine months. It has lost 14.85% (or Rs22.62) to date, compared to the record high of Rs152.27 recorded in May 2021.

“Rupee is in correction mode,” Tariq said, predicting that the Pakistani currency should trade in the range of Rs174-176.

Meanwhile, some exchange dealers believe that the Pakistani rupee posted nominal losses weighed by import payments.

“We saw some dollar demand from importers and corporates, while supplies weakened,” a foreign exchange dealer said.

Currency dealers believe that the currency is stabilising and the movement will depend on the economic data, particularly trade numbers.