PKR continues its ascent, appreciates by over 12 paisa against USD

January 18, 2024 (MLN): The Pakistani rupee (PKR) continued its ascent by appreciating 12.16 paisa against the US dollar in Thursday's interbank session to settle PKR 279.98 per USD, compared to the previous session's closing of PKR 280.1 per USD.

The currency saw an intraday high (bid) of 280.25 and a low (ask) of 279.75.

In the open market, Exchange Companies quoted the dollar at 278.35 for buying and 280.75 for selling.

In a noteworthy development, the country has received the second installment of SDR 528 million, equivalent to $705.6m from the International Monetary Fund (IMF).

The recent economic data released by the central bank has further demonstrated positivity.

The PKR's Real Effective Exchange Rate Index (REER) increased by 0.6% MoM in December 2023 to a provisional value of 98.86  from the revised value of 98.28 in November 2023.

Additionally, Pakistan recorded a current account surplus of $397 million largely due to a decline in imports and an increase in exports.

Moreover, the cash-strapped nation attracted substantial foreign investments worth $243m in December, a 56% increase from the previous month and the highest level in a year.

The home unit has found stable ground amid increased liquidity in the foreign exchange market due to tighter enforcement of regulations, a shrinking money supply, a balance of payments surplus on account of low import demand, and a moratorium on Chinese debt repayments.

However, the IMF has highlighted that although economic activity has stabilized the outlook remains challenging and dependent on the implementation of sound policies. 

In comparison to major currencies, PKR lost 23.18 paisa against the Euro, closing at 304.67 compared to the previous value of 304.44.

The British Pound became expensive by 72.8 paisa closing at 355.24 compared to 354.51 a day ago.

The Swiss franc saw losses of 1.12 rupees, closing at 323.66 compared to 324.77 from the previous session.

Against the Japanese Yen, PKR lost 0.01 paisa, closing at 1.8941 versus 1.894 a day ago.

The Chinese Yuan lost 1.55 paisa, closing at 38.9 against 38.92 from the previous session.

The Saudi Riyal closed at 74.65 with a loss of 3.24 paisa from its value of 74.68 a day ago.

The U.A.E Dirham decreased in value by 3.21 paisa from 76.23 a day ago to 76.26.

During the current financial year, PKR has appreciated against the Dollar by 6.01 rupees or 2.15%. While the current calendar year has seen PKR appreciate by 1.88 rupees or 0.67%.

In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates remained unchanged at 20.48 and 20.73%.

In the recent Pakistan Investment Bonds (PIB) auction held by the State Bank of Pakistan (SBP), the yields witnessed a drop of up to 50bps.

The persistent drop is attributed to market participants' expectations that interest rates have peaked and are expected to fall in the coming months.

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