PKR continues upward momentum, gains over 1 rupee against greenback

October 04, 2023 (MLN): The Pakistani rupee (PKR) appreciated by 1.04 rupees against the US dollar in Wednesday's interbank session as the currency settled the trade at PKR 284.68 per USD, compared to the previous session's closing of PKR 285.72 per USD.

The local unit saw an intraday high (bid) of 285.65 and a low (ask) of 284.6.

In the open market, the local unit gained 1.5 rupees as exchange companies quoted the dollar at 281.5 for buying and 283.5 for selling, compared to the previous closing of 283 for buying and 286 for selling.

The PKR had been experiencing its fair share of challenges over the past few months, but September emerged as a month of renewed hope, buoyed by the army-backed administrative reforms to save the sinking ship.

The local unit finished the month marked by second-best performance since 2014 in percentage terms, gaining 6.19% against the US Dollar, and took home the coveted title of best-performing currencies in the world for the month.

In stark contrast to the bleak macros that had plagued the Pakistani rupee, the army-backed crackdown on the illegal dollar trades has significantly helped the PKR.

Moreover, recent reforms introduced by the State Bank of Pakistan (SBP) to consolidate and transform various types of exchange companies into a single category with a well-defined mandate and higher capital requirements are also enhancing transparency.

To note, SBP suspended the authorization of four exchange companies in September, underscoring the central bank's commitment to ensuring compliance with regulatory standards.

These reforms also apply to the banks actively engaged in foreign exchange business, mandating them to set up wholly owned ECs to address the legitimate foreign exchange needs of the general public.

Following the guidelines of the central bank, certain banks such as; Bank Al Falah Limited (BAFL), Faysal Bank Limited (PSX: FABL),  Allied Bank Limited (PSX: ABL), Bank Al Habib Limited (PSX: BAHL), MCB Bank Limited (PSX: MCB), Meezan Bank Limited (PSX: MEBL), and United Bank Limited (PSX: UBL), have decided to establish their own exchange company.

In comparison to major currencies, PKR gained 1.23 rupees against the Euro, closing at 298.33 compared to the previous value of 299.56.

The British Pound became cheaper by 1.44 rupees closing at 343.98 compared to 345.42 from a day ago.

The Swiss franc saw losses of 1.22 rupees, closing at 309.4 compared to 310.62 from the previous session.

Against the Japanese Yen, PKR lost 0.45 paisa, closing at 1.912 versus 1.908 a day ago.

The Chinese Yuan gained 14 paisa, closing at 38.9893 against 39.1319 from the previous session.

The Saudi Riyal closed at 75.9 with a loss of 27 paisa from its value of 76.17 a day ago.

The U.A.E Dirham decreased in value by 29 paisa from 77.79 a day ago to 77.504.

During the current financial year, PKR has appreciated against the Dollar by 1.31 rupees or 0.46%. While the current calendar year has seen PKR depreciate by 58.25 rupees or 20.46%.

In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched up by 2 basis points 22.73% and 22.98%.

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