PKR sheds one rupee against US dollar

August 25, 2022 (MLN): Enduring the spell of depreciation, the Pakistani rupee (PKR) has depreciated by 1 rupee against the US dollar in today's interbank session as the currency settled the trade at PKR 219.41 compared to the previous closing of 218.38 per USD.

During the session, the rupee traded in a range of 1.25 rupees per USD showing an intraday high bid of 219.50 and an intraday low offer of 218.50 while in the open market, PKR was traded at 225/228 per USD.

Speaking to Mettis Global, Zafar Paracha, President of Exchange Companies of Pakistan said, “The notable difference of 8.5 rupees between the rates being offered by the interbank market and open market indicate the element of smuggling.”

He also said that the government’s expenditures on international tours and lifting a ban on imports have also played a vital role in the surging demand for dollars.

Meanwhile, Shahrukh Saleem, Senior Analyst told Mettis Global, “Since the open market and the interbank market has independent liquidity of dollars so as the demand, the difference in rates may be surfaced up.”

Malik Boston, President of the Forex Association of Pakistan said that the local unit is under pressure on the back of the newly enforced law by UAE for Pakistani travelers to have 5,000 dirhams along with a valid work visa and a return ticket.

This development came after when UAE authorities deported 80 Pakistanis for having fake return tickets and analysts are of the view that the surging demand for AED would continue to pressure PKR.

Meanwhile, other experts are of the view that exporters are holding export proceeds that have created pressure on the local unit.

In FYTD, PKR lost 14.56 rupees or 6.64%, while it plummeted by 42.9 rupees or 19.55% against the USD in CYTD, as per data compiled by Mettis Global.

During the last 52 weeks, PKR lost 24.52% against the greenback while reaching its lowest at 239.94 on July 28, 2022, and the highest at 165.62 on August 27, 2021.

Furthermore, the local unit has weakened by 11.65% against EUR when it was highest on March 07, 22 while the rupee weakened by 12.68% against GBP since its high on August 27, 2021.

The currency further weakened by 2.03%, 1.94%, 1.19%, 1.08%, 1.06%, 0.40%, and 0.36% against AED, SAR, CNY, CHF, JPY, GBP and EUR, respectively in last seven sessions. 

Meanwhile, the currency lost 1.6 rupees to the Pound Sterling as the day's closing quote stood at PKR 259.78 per GBP, while the previous session closed at PKR 258.22 per GBP.

Similarly, PKR's value weakened by 2 rupees against EUR which closed at PKR 219.3 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 15.00/15.50%, whereas the 1-week rate was 15.05/15.15%.

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