The rupee misplaced Rs3.5 to achieve Rs162.5 in opposition to the greenback within the interbank market on Wednesday as numerous components of the nation noticed various levels of a lockdown.
When it comes to proportion, the greenback rose by 2.22 per cent over the day gone by’s closing worth of Rs159.
The rise in greenback got here solely a day after the State Financial institution of Pakistan, in an emergency assembly, slashed its key charge by one other 150 foundation factors within the wake of rising coronavirus instances and enterprise disruptions induced.
For the reason that Financial Coverage Committee assembly on March 17, rates of interest have been reduce by a complete of 225 bps over two rounds.
“As the interest rates were cut, investors, especially foreigners, offloaded their holdings in the market treasury bills to seek the safety of dollars — a safe haven. This increased the demand for the greenback in the market,” stated Zafar Paracha, former secretary normal of Trade Corporations Affiliation of Pakistan.
After staying calm for nearly half a 12 months, the forex market began witnessing volatility from March 10 when it fell by Rs3.65 in a single day.
Over the previous two weeks, the greenback has jumped by Rs8.25 (or 5.35computer) to Rs162.5, in comparison with Rs154.25.
In the meantime, no dealing was completed within the open market in mild of the lockdown. Nevertheless, a day in the past, the greenback was being traded at Rs160 at change corporations despite the fact that operations have been fairly restricted.