April 08, 2022 (MLN): Snapping its long losing streak, the Pakistani rupee (PKR) recovered by 3.5 rupees against the greenback in the interbank session as the currency closed the week’s trade at 184.68 per USD in the interbank market, compared to yesterday’s closing of PKR 188.18, witnessing a massive fall of two rupees.
This notable appreciation is primarily attributable to the SBP’s bold move of increasing the policy rate by 250 basis points to 12.25% to counter the external shocks and inflationary pressures.
In addition to it, SBP has already initiated the process by increasing the list of items that are subject to a 100% cash margin requirement to control imported inflation and support the balance of payments.
Meanwhile, the Supreme Court’s decision to restore National Assembly has significantly contributed to clear the clouds of political uncertainty.
The rupee endured a highly volatile trading session with quotes being recorded in a range of 3.7 rupees per USD showing an intraday high bid of 188.10 and an intraday low offer of 184.70.
It is prudent to mention that the outgoing week was proved to be the roughest slide for the local currency as it has crossed the mark of PKR 188 per USD yesterday on the back of amplified political unrest, and depleting forex reserves which stood at the lowest level of $17.47bn since June 26, 2020.
During the week, the currency has lost 59 paisa against the greenback, as the previous week was concluded at PKR 184.09 per USD.
From July’21 to date, the local unit has lost Rs27.14 against the USD. Similarly, the rupee fell by Rs8.17 in CY22 with the month-to-date (MTD) position showing a drop of 0.65%, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 17.55% against the greenback, reached its lowest at 184.68 today and touched its high of 152.27 on May 7, 2021.
Furthermore, the local unit has weakened by 9.44% since its high on April 12, 2021, against EUR while, it has dropped by 12.88% against GBP since its high on April 09, 2021.
PKR has also appreciated against other currencies in today’s session as the currency strengthen by 2.45%, 2.32%, 2.13%, 1.92%, 1.89%, 1.89%, against GBP, EUR, CHF, CNY, SAR and AED, respectively.
Within the open market, PKR was traded at 188/189 per USD.
Meanwhile, the currency gained 5.9 rupees against the Pound Sterling as the day's closing quote stood at PKR 240.65 per GBP, while the previous session closed at PKR 246.55 per GBP.
Similarly, PKR's value strengthened by 4.7 rupees against EUR which closed at PKR 200.46 at the interbank today.
On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation (OMO) in which it injected Rs3.08 trillion into the market for 7 days at 12.28 percent.
The overnight repo rate towards close of the session was 12.25/12.50 percent, whereas the 1-week rate was 10.10/10.20 percent.
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