Rupee retreats versus dollar on political concerns

KARACHI: The rupee Wednesday depreciated 0.35% against the dollar as political uncertainties dampened the excitement spurred by hopes of inflows from the International Monetary Fund (IMF) and China.

According to the State Bank of Pakistan (SBP), the rupee ended at 221.43 after losing Re0.78 in the interbank market, down in value from yesterday's close of 220.65.

Arif Habib Limited, in a note, said volatility was the order of the exchange rate in recent weeks amid debt obligations over the next 12 months with global conditions continuing to be tough.

“In particular, effective negotiation with bilateral and multilateral partners, especially post floods will help stabilise the parity,” the brokerage said.

The US dollar Wednesday weakened in the international market as investors await US Federal Reserve's policy decision amid speculation it might indicate a slowdown in future rate hikes.

The rupee may further depreciate as Consumer Price Index (CPI) based inflation increased to 26.6% year-on-year in October 2022 against 23.2% in September and 9.2% in October 2021, according to the Pakistan Bureau of Statistics.