June 21, 2022 (MLN): The economic downturn has forced the Pakistani rupee (PKR) towards a bottomless pit as the currency lost 1.5 rupees to settle today’s interbank session at PKR 211.48 per USD compared to the previous close of 209.96 per USD.
During the session, the domestic unit was traded in a range of 2.57 per US dollar, witnessing an intraday high bid of 211.70 and an intraday low offer of 210.13 while in the open market, the local unit was traded at PKR 212/214 per USD.
The upward march of the dollar is mainly due to its surging demand by the importers who have to pay 100% bill at the time of the trade. According to the experts, the foreign banks are deeply concerned about the depleting foreign exchange reserves of Pakistan and its ability to pay the outstanding bills in the future.
Furthermore, news flows suggested that differences between IMF and Pakistan’s government are yet to be settled which is also building severe pressure on PKR.
However, on the upside, the USA has agreed to intervene in the matter as it will help Pakistan to negotiate the deal with IMF.
According to the official sources of the Finance Ministry, the most crucial meeting between Pakistan and IMF is expected tonight.
Positive outcome of the meeting will surely bring significant respite to PKR and stability in the interbank market.
Meanwhile, in a move to improve the liquidity in the interbank market, the State Bank of Pakistan (SBP) will likely reverse around $590 million to scheduled banks against Cash Reserve Requirement (CRR).
From July’21 to date, the local unit has lost Rs53.93 against the USD. Similarly, the rupee fell by Rs34.97 in CY21, with the month-to-date (MTD) position showing a decline of 6.16%, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 25.51% against the greenback while reaching its lowest at 211.48 today, and the highest of 157.57 on June 30, 2021.
Furthermore, the local unit has weakened by 16.43% since its high on July 02, 2021, against EUR while, it has dropped by 16.51% against GBP since its high on July 02, 2021.
The performance of the local unit remained bleak against other major currencies during FTDY as the currency lost its value by 25.51%, 25.47%, 22.75%, 22.07%, 16.24%, 16.21%, and 8.69% against AED, SAR, CNY, CHF, GBP, EUR, and JPY, respectively.
Meanwhile, the currency lost 3 rupees to the Pound Sterling as the day's closing quote stood at PKR 260.23 per GBP, while the previous session closed at PKR 257.27 per GBP.
Similarly, PKR's value weakened by 2.2 rupees against EUR which closed at PKR 223.5 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 13.35/13.45 percent.
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