February 08, 2023 (MLN): Riding a seesaw journey, the Pakistani rupee (PKR) has reported a loss of 2.95 rupees against the US dollar in today's interbank session as the currency settled the day's trade at PKR 273.33 per USD, compared to previous closing of PKR 276.28 per USD.

Enduring a volatile session, the local unit traded in a band of 4.5 rupees, showing an intraday high bid of 275 and low offer of 272 while in the open market, PKR was traded at 270/277 per USD.

It is pertinent to note that during intraday trade, the currency marked notable gain against the mighty dollar as exporters were offloading their proceeds, taking fair advantage of higher dollar rates.

Meanwhile, Pakistan’s chemical industry imported its first-ever raw material consignment from Saudi Arabia in PKR, paving the way for further imports in the local currency and relieving pressure from the country’s dwindling forex reserves, as per reported by Express Tribune today.

Further, experts are of the view that the currency market is expected to remain volatile until the IMF decision.

The currency is experiencing a serious bloodbath since last month amid the absence of fresh inflows, stalled talks with the IMF, and political turmoil.

According to Bloomberg, millions of dollars are being smuggled into Afghanistan from Pakistan every day, providing some support for the squeezed economy after the US and Europe denied the Taliban regime access to billions in foreign reserves.

For Islamabad, the outflows are exacerbating a rapidly developing economic crisis. Traders and smugglers are bringing as much as $5 million across the border daily, according to Muhammad Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan, a 26-member body of currency dealers. That more than covers as much as $17mn that Afghanistan’s central bank injects into the market each week.

For Pakistan, it’s contributing to the depletion of foreign reserves and adding to the downward pressure on the rupee as the currency tumbles to record lows and the economy teeters on the edge of

collapse.

Pakistan is facing a challenging time, with the rupee's value dropping to record lows and the outflows to Afghanistan exacerbating the situation.

The recent efforts of the exporters and the chemical industry provide some hope, but the outcome of the talks with the IMF and the stability of the political climate will also play a crucial role in the future of the economy.

Meanwhile, the currency gained 1.5 rupees against the Pound Sterling as the day's closing quote stood at PKR 330.62 per GBP, while the previous session closed at PKR 332.13 per GBP.

Similarly, PKR's value strengthened by 2.5 rupees against EUR which closed at PKR 293.92 at the interbank today.

In FYTD, PKR lost 68.48 rupees or 25.05%, while it plummeted by 1.65% against the USD in the last seven sessions, as per data compiled by Mettis Global.

On another note, within the money market, the overnight repo rate towards the close of the session was 16.5%/16.75% whereas the 1-week rate was 16.75%/16.85%.

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Posted on: 2023-02-08T16:53:22+05:00