May 05, 2023 (MLN): The Pakistani rupee (PKR) managed to gain 23 paisa against the mighty US dollar in today's interbank session as the currency settled the trade at PKR 283.59 per USD compared to yesterday's closing of PKR 283.82 per USD.
Throughout today’s session, the local unit traded in a band of 50 paisa, showing an intraday high bid of 284 and a low offer of 283.6 while in the open market, PKR was traded at 286.5/290 per USD.
Though the local unit seems to be stable within this week, the plummeting reserves and the continuous delay in securing the IMF deal may push PKR toward the bottomless pit in days to come.
The foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by $5.6 million or 0.12% WoW to $4.45 billion during the week ended on April 28, 2023.
The country has started its budget for FY24, and according to media reports, the upcoming budget is expected to be very difficult for citizens, as the government is planning to implement the IMF's conditionalities.
According to Reuters, the is preparing to discuss Pakistan's budget plans for the coming financial year as part of a process to unlock a crucial financing injection for the cash-strapped nation, the IMF's country mission chief said.
An IMF review of the budget presents a fresh hurdle before the lender approves the release of pending bailout funds, which are crucial for Pakistan to resolve an acute balance of payments crisis. A staff-level agreement to release $1.1 billion has been delayed since November.
"In all IMF programs, the authorities issue a letter of intent associated with the last review outlining their policy intentions for the period after the program," Nathan Porter, IMF mission chief to Pakistan, told Reuters on Thursday.
Pakistan has struggled to strike a deal with the IMF to release funds critical to stabilize the struggling economy.
Alternatively, the currency lost 81 paisa to the Pound Sterling as the day's closing quote stood at PKR 357.41 per GBP, while the previous session closed at PKR 356.6 per GBP.
On the other hand, PKR's value strengthened by 100 paisa against EUR which closed at PKR 312.72 at the interbank today.
In FYTD, PKR lost 78.74 rupees or 27.77%, while it plummeted by 57.15 rupees or 20.16% against the USD in CYTD. Within the last seven sessions, the local unit moved up by 0.09%, as per data compiled by Mettis Global.
On another note, within the money market, the central bank conducted an Open Market Operation (OMO), and Shariah-compliant Mudarabah OMO today, in which it cumulatively injected a total of Rs146.9 billion into the market, from which Rs105.5bn injected into the market under reverse repo.
Moreover, SBP also conducted Shariah-compliant Mudarabah OMO today, in which it injected Rs41.4bn into the market.
The overnight repo rate towards the close of the session was 20.10%/20.50%, whereas the 1-week rate was 20.95%/21.05%.
Copyright Mettis Link News
Posted on: 2023-05-05T16:51:58+05:00
