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PKR closes at 204.85/USD, up by 2.4 rupees in four sessions

June 30, 2022 (MLN): Rejoicing the positive news on the IMF front which would also pave the way for fresh inflows from other friendly countries, the Pakistani rupee (PKR) has gained 2.4 rupees in four consecutive sessions to settle the week’s trade at PKR 204.85 per USD.

In today’s session, the domestic unit has appreciated by 25 paisa after being traded in a band of 1.42 rupees, showing an intraday high bid of 205.17 and an intraday low offer of 204.20. While, in the open market, PKR was traded at 202.50/204.50 per USD.

In response to the announcement of the Memorandum of Economic and Financial Policies (MEFP) received from IMF for the combined 7th and 8th reviews, PKR started making gains against the US dollar in the inter-bank market.

Experts are of the view that this was the most significant step to validate that both sides have reached an agreement for the revival of $6 billion programs.

MEFP includes an increase in electricity tariffs, imposing a levy on petroleum products, ending the government’s role in determining the oil prices, and setting up an anti-corruption task force to review all the existing laws that were aimed at curbing graft in the government departments.

After implementing the conditions, the IMF would present Pakistan’s request for the approval of the loan tranche and revival of the program to its executive board – a process that may consume another month.

The government is on its toes to unlock the IMF deal as soon as possible to bring the economic stability back. As a result, the National Assembly on Wednesday passed the Finance Bill-2022 after clause-by-clause consideration and adopting certain amendments in it.

During the debate on the Finance Bill, Minister of State for Finance and Revenue Aisha Ghaus Pasha said that there had been no pressure from the fund to integrate amendments in the federal budget 2022-23 saying that the changes had been made in the larger interest of the country.

Speaking to Mettis Global, Zafar Paracha, President of Exchange Companies of Pakistan said, “Despite the expected inflows from IMF, China and Saudi, PKR will remain under pressure in the long term as the government has to repay debts in FY23.”

Earlier on Friday, the State Bank of Pakistan (SBP) received a $2.3 billion loan from a Chinese consortium that also improved traders' sentiments.

During FY22, the local unit plummeted by Rs47.30 or 23.09% against the USD. Similarly, the rupee fell by Rs28.33 or 13.83% in CYTD, with the month-to-date (MTD) position showing a decline of Rs6.38 or 3.12%, as per data compiled by Mettis Global.

During the last 52 weeks, PKR lost 22.93% against the greenback while reaching its lowest at 211.93 on June 22, 2022, and the highest of 157.87 on July 02, 2021.

Furthermore, the local unit has weakened by 12.64% since its high on July 02, 2021, against EUR while, it has dropped by 12.56% against GBP since its high on July 02, 2021.

The performance of the local unit remained bleak against other major currencies in FY22 as the currency weakened by 23.09%, 23.06%, 20.37%, 20.29%, 12.41%, 12.28%, and 5.21% against AED, SAR, CHF, CNY, EUR, GBP, and 5.21%, respectively.

Meanwhile, the currency gained 1.6 rupees against the Pound Sterling as the day's closing quote stood at PKR 248.48 per GBP, while the previous session closed at PKR 250.04 per GBP.

Similarly, PKR's value strengthened by 1.8 rupees against EUR which closed at PKR 213.81 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 12.75/12.80 percent, whereas the 1-week rate was 12.95/13.05 percent.

Copyright Mettis Link News

Posted on: 2022-06-30T16:43:31+05:00

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