PKR slides by 46 paisa against USD

October 17, 2022 (MLN): On the back of melting foreign exchange reserves, political noise and bleak macros, the Pakistani rupee (PKR) has extended its losing journey by 46 paisa against the dollar in today's interbank session as the currency settled the trade at PKR 218.89 compared to previous session's closing of PKR 218.43 per USD.

During the session, the rupee traded in a range of 75 paisa per USD showing an intraday high bid of 219 and an intraday low offer of 218.75 while in the open market, PKR was traded at 223/224.50 per USD.

The country is facing a severe foreign exchange reserves crisis as the central bank’s foreign exchange reserves dropped $303 million to a three-year low of $7.597 billion. Thus, the earlier sentiments in the market which strengthened PKR against USD established Ishaq Dar’s taking the helm of the economy as the Finance Minister started wearing off.

While speaking to MG Link News, Tahir Abbas Head of Research at Arif Habib Limited said that the primary reason behind the rupee depreciation is the external repayment of commercial borrowing.

He was of the view that after Prime Minister Shahbaz Sharif’s visit to China next month for the rescheduling of the $30 billion loan, “We can see a positive change in the rupee.”

However, in the long run, the rupee will remain below Rs220 due to melting foreign exchange reserves, he added.

Alternatively, the currency gained 14 paisa against the Pound Sterling as the day's closing quote stood at PKR 246.62 per GBP, while the previous session closed at PKR 246.76 per GBP.

On the other hand, PKR's value weakened by 12 paisa against EUR which closed at PKR 213.4 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 15.50/15.70 percent, whereas the 1-week rate was 15.13/15.23 percent.

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