KARACHI: The Pakistani rupee on Tuesday recorded further losses against the US dollar, depreciating 0.31% in interbank.
At close, the rupee settled at 287.54, a decrease of Rs0.90, as per the State Bank of Pakistan (SBP).
On Monday, the Pakistani rupee registered a marginal decline against the US dollar to depreciate 0.07% to settle at 286.64.
In a key development, the State Bank of Pakistan (SBP) on Monday kept the key policy rate unchanged at 22%, governor Jameel Ahmad has announced.
Prior to this announcement, some analysts anticipated the status quo, while others predicted a rate increase of 100–200 basis points.
The Monetary Policy Committee kept the key policy rate at 21% during its meeting on June 12, 2023. In that statement, it was stated that the tight monetary policy, domestic unrest, and ongoing strain on the external account would cause domestic demand to stay weak.
“In this backdrop, and given the declining m/m trend, the MPC views inflation to have peaked at 38 percent in May 2023, and barring any unforeseen developments, expects it to start falling from June onwards.”
However, on June 26, the MPC convened an emergency meeting, and decided to raise the policy rate by 100 bps to 22% to keep real interest rate firmly in the positive territory on a forward-looking basis. It cited “certain upward revisions in taxes, duties and PDL rate in FY24 budget” and the SBP’s withdrawal of the general guidance for commercial banks on prioritisation of imports as having increased the “upside risks to the inflation outlook” for the rate-hike.
