The Pakistani rupee depreciated by 90 paisas against the US dollar in the interbank trading on Tuesday, reported 24NewsHD TV channel.
According to the State Bank of Pakistan, the local currency made a good start at interbank in early trading but later the trend reversed and the local unit lost 90 paisas in value to the greenback which ended the day at Rs287.54.
Yesterday, the local currency declined by 19 paisas, settling the trade at Rs286.45 per USD by the end of the day.
https://twitter.com/StateBank_Pak/status/1685971134045700096
Pakistan is grappling with low forex reserves and a high inflation rate.
The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) in its meeting held yesterday, decided to keep the policy rate unchanged at 22%.
The decision was as per the expectation of the market as the majority of the traders were in favour of keeping a lid on the current interest rate.
The MPC noted that the economic uncertainty has decreased since the last meeting, whereas near-term external sector challenges have been largely addressed and investor confidence has shown improvement.
The Committee, however, has noted two important domestic developments since the last meeting that have slightly deteriorated inflation outlook and which could potentially increase pressure on the already stressed external account.
First, there are certain upward revisions in taxes, duties and PDL rate in FY24 budget as approved by the National Assembly on June 25.
Second, the SBP, on June 23, withdrew its general guidance for commercial banks on prioritization of imports.
While the MPC views these measures as necessary in the context of the completion of the ongoing IMF program, they have increased the upside risks to the inflation outlook. The Committee views that additional tax measures are likely to contribute to inflation both directly and indirectly, while the relaxation in imports may exert pressures in the foreign exchange market. The latter may result in higher-than-earlier anticipated exchange rate pass-through to domestic prices.
https://twitter.com/StateBank_Pak/status/1685981580102434816
Reporter Ashraf Khan