PKR continues to suffer, down by 25 paisa per USD

January 18, 2023 (MLN): While enduring a choppy journey, the Pakistani rupee (PKR) has further depreciated by 25 paisa against the US dollar in today's interbank session as the currency settled the trade at PKR 228.91 per USD compared to yesterday's closing of PKR 228.66 per USD.

Within today’s session, the local unit traded in a band of 35 paisa per USD showing an intraday high bid of 228.75 and low offer of 228.65 while in the open market, PKR was traded at 236.63/238.99 per USD.

The local unit is under pressure due to the dollar shortage and the rising difference between the rate of the greenback in the open market and the grey market.

However, Governor State Bank of Pakistan (SBP) Jameel Ahmed is optimistic that Pakistan will observe the inflow of dollars from next week which will improve the position of foreign exchange reserves of the country.

While speaking to the business community at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the SBP chief said, "Though the foreign exchange reserves of the country melted to a low level there are projects in the pipeline will that will help improve reserves.” 

Rising political heat, the absence of the International Monetary Fund (IMF) program and the government’s indecisiveness to consider effective measures to pull the economy out of the mess have compelled local unit to lose value.

According to media reports, the fund has asked Islamabad to share the plan/roadmap for the collection of Rs855bn through the Petroleum Development Levy (PDL). In addition, the fund also asked for the settlement of circular debt in the gas sector for which the government is compelled to raise gas prices.

In FYTD, PKR lost 24.06 rupees or 10.51%, while it plummeted by 0.43% against the USD in the last seven sessions, as per data compiled by Mettis Global.

Meanwhile, the currency lost 3.4 rupees to the Pound Sterling as the day's closing quote stood at PKR 282.65 per GBP, while the previous session closed at PKR 279.28 per GBP.

Similarly, PKR's value weakened by 1.1 rupees against EUR which closed at PKR 248.62 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 15.05%/15.15%, whereas the 1-week rate was 15.15%/15.25%.

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