PKR depreciates by 3.42 rupees against USD

August 16, 2023 (MLN): The Pakistani rupee (PKR) depreciated by 3.42 rupees against the US dollar in Wednesday's interbank session as the currency settled the trade at PKR 294.93 per USD, compared to the previous session's closing of PKR 291.51 per USD.

The currency saw an intraday high (bid) of 295.25 and a low (ask) of 294.75.

In the open market, Exchange Companies quoted the dollar at 300 for buying and 303 for selling.

The decline can be attributed to the removal of restrictions on letters of credit (LCs), which has led to an increased demand for dollars and subsequently weakened the rupee.

Thousands of companies are finding it difficult to obtain import permits for their manufacturing needs due to dollar shortages, resulting in cargoes remaining stuck in ports.

This situation arises as the government restricts the demand for dollars to prevent the depletion of the nation's FX reserves.

“Absolutely there is a dollar shortage,” Khurram Shehzad, chief executive officer of Alpha Beta Core Solutions Pvt. Ltd told Bloomberg.

“Companies will continue to operate at bare minimum capacity. Imports will normalize eventually, but it can take six more months,” he added.

In comparison to major currencies, PKR lost 3.98 rupees against the Euro, closing at 322.36 compared to the previous value of 318.38.

The British Pound became more expensive by 6.32 rupees closing at 376.13 compared to 369.81 from a day ago.

The Swiss franc saw gains of 3.54 rupees, closing at 335.78 compared to 332.24 from the previous session.

Against the Japanese Yen, PKR lost 2.81 paisa, closing at 2.0271 versus 1.999 a day ago.

The Chinese Yuan gained 43.71 paisa, closing at 40.46 against 40.02 from the previous session.

The Saudi Riyal increased in value by 93.23 paisa from 79.36 a day ago to 80.30.

The U.A.E Dirham closed at 78.6442 with a gain of 92.97 paisa from its value of 77.72 a day ago.

During the current financial year, PKR has depreciated against the Dollar by 8.94 rupees or 3.03%. While the current calendar year has seen PKR depreciate by 68.5 rupees or 23.23%.

In the Money Market, the benchmark 6-Month Karachi Interbank Bid and Offer rates inched up by 4 bps to 22.84% and 23.09%.

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