May 18, 2022 (MLN): After witnessing a storm-tossed session on Wednesday, the Pakistani rupee (PKR) slid by 2.6 rupees against the US dollar in the interbank session as the currency settled the trade at PKR 198.39 compared to the previous closing of PKR 195.74 per USD.
While enduring a rough session, the rupee traded in a range of 3.1 rupees, witnessing an intraday high bid of 199.25 and an intraday low offer of 196.5.
At the same time, the elevated demand for dollars amid panic created by uncertain market conditions has touched the phycological mark of PKR 200 as the local unit was traded at 198/200 per USD.
Asad Rizvi, the former Treasury Head at Chase Manhattan said, “The current pressure on the local unit is due to the silence from the side of SBP and continuous decline in foreign exchange reserves.”
Meanwhile, the rising oil prices in the international market have also kept PKR under severe pressure, he added.
He went on to say, “Since Pakistan is a borrowing economy with a notable trade deficit and a deteriorating balance of payment, the IMF factor is playing a vital role.”
Political instability is one of the major factors behind the delay in the IMF tranche which has made the situation worst for Pakistan. He added, “Present situation is out of the government’s hands and it is difficult to manage without external support. Even persistent inflow of record remittances is not helping.”
If the talks remain in favor of Pakistan, the pressure from the exchange rate will be eased off.
During the day, the performance of PKR remained bleak against major currencies as it weakened by 1.81%, 1.36%, 1.34%, 1.34%, 1.31%, 1.28%, and 1.07% against EUR, JPY, SAR, AED, CNY, CHF, and GBP, respectively.
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From July’21 to date, the local unit has lost Rs40.84 against the USD. Similarly, the rupee fell by Rs21.87 in CYTD, with the month-to-date (MTD) position showing a wither of 6.40%, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 22.77% against the greenback, reached its lowest at 198.39 today, and touched its high of 153.22 on May 19, 2021.
Furthermore, the local unit has weakened by 10.50% since its high on July 02, 2021, against EUR. While, it has dropped by 11.99% against GBP since its high on May 20, 2021.
Meanwhile, the currency lost 2.6 rupees to the Pound Sterling as the day's closing quote stood at PKR 246.06 per GBP, while the previous session closed at PKR 243.42 per GBP.
Similarly, PKR's value weakened by 3.8 rupees against EUR which closed at PKR 208.7 at the interbank today.
On another note, within the money market, the overnight repo rate towards the close of the session was 11.90/12.25 percent, whereas the 1-week rate was 12.35/12.45 percent.
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