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PKR: Back from the dead

PKR: Back from the dead
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March 10, 2023 (MLN): China’s $500 million has prevented the Pakistani rupee (PKR) to extend its losing spree as the local unit appreciated by 1.5 rupees against the US dollar in today's interbank session after witnessing a significant drop in the previous two sessions.

PKR settled the trade at PKR 280.77 per USD, compared to yesterday's closing of PKR 282.3 per USD.

Throughout today’s session, the local unit traded in a band of 2.25 rupees, showing an intraday high bid of 281.25 and low offer of 279.50 while in the open market, PKR was traded at 279.50/283 per USD.

The currency market observed some respite from uncertainty and chaos situation today on the back of a small pump in the foreign exchange reserves due to the commercial loan disbursement from China wherein SBP received $500 million from China Development Bank.

Accordingly, the foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $486.9 million or 12.76% WoW to $4.3 billion during the week ended on March 03, 2023, marking the fourth consecutive increase on weekly basis.

However, the delay in much-needed inflows from IMF has been putting significant pressure on local currency as well in the past weeks.

Though the government had complied with almost all the conditions, it is unable to get a clean chit from the fund.

In addition, workers' remittances for the month of February registered an increase to 4.9% MoM $2 billion, compared to $1.89bn in January 2023, data issued by SBP revealed today. 

During the week, the currency lost 2.3 rupees against the greenback, as the previous week was concluded at PKR 278.46 per USD.

Alternatively, the currency lost 1.2 rupees to the Pound Sterling as the day's closing quote stood at PKR 335.67 per GBP, while the previous session closed at PKR 334.44 per GBP.

On the other hand, PKR's value strengthened by 30 paisa against EUR which closed at PKR 297.56 at the interbank today.

In FYTD, PKR lost 75.92 rupees or 27.04%, while it plummeted by 54.34 rupees or 19.35% against the USD in CYTD. On the other hand, within the last seven sessions, the local unit moved down by 0.82%, 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 Rs1.14 trillion into the market, from which Rs1.08tr injected into the market of which Rs76.8bn were injected at 20.20% for 7-day and Rs1.01tr were injected at 20.09% rate of return for 77-day.

Moreover, SBP also conducted Shariah-compliant Mudarabah OMO today, in which it injected Rs25.5bn into the market at 20.15% for 7-day whereas bids for 77-day tenure were not received.

The overnight repo rate towards the close of the session was 20%/20.25%, whereas the 1-week rate was 19.75%/19.85%.

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Posted on: 2023-03-10T17:36:18+05:00