June 13, 2022 (MLN): The Pakistani rupee (PKR) registered yet another low against the US dollar on Monday as it dropped to almost Rs203.86 against the greenback in the interbank market amidst depleting foreign exchange reserves and rising concerns over the IMF program.
During the session, the local unit lost its value by 1.5 rupees per USD, trading in a range of intraday high of 204 and an intraday low offer of 202.65 while in the open market, it traded at 203.50/204.50 per USD.
Market experts are of the view that PKR is under the severe pressure of dwindling macros and political upheaval.
Speaking to Mettis Global, Malik Bostan, President of Forex Association of Pakistan said that the market is still waiting for clarity on the IMF front. Until and unless the IMF side does not provide any positive signal, the pressure will keep on mounting.
He went on to say that due to depleting foreign exchange, the foreign banks have demanded 100% to open LCs. Meanwhile, the political chaos is adding fuel to the fire
The significant decline in workers’ remittances along with commodity headwinds in the international market has badly hurt the domestic unit, Saad Hashmi, Executive Director at BMA Capital Management told Mettis Global.
On the basis of REER, the sooner the country gets a tranche from IMF and positive remarks from FATF, PKR may start witnessing stabilization, he added.
From July’21 to date, the local unit has lost Rs46.31 against the USD. Similarly, the rupee fell by Rs27.34 in CYTD, with the month-to-date (MTD) position showing a decline of 2.65%, as per data compiled by Mettis Global.
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During the last 52 weeks, PKR lost 23.03% against the greenback while reaching its lowest at 203.86 on June 13, 2022, and the highest of 156.18 on June 14, 2021.
Furthermore, the local unit has weakened by 12.56% since its high on July 02, 2021, against EUR while, it has dropped by 12.81% against GBP since its high on July 02, 2021.
In addition, the performance of PKR remained bleak in CYTD as it weakened by 13.48%, 13.41%, 8.52%, 6.54%, 6.16%, and 4.38% against SAR, AED, CNY, EUR, CHF, and GBP, respectively. On the hand, the local unit has appreciated by 1.01% against JPY in the same period.
Alternatively, the currency gained 3.2 rupees against the Pound Sterling as the day's closing quote stood at PKR 249.2 per GBP, while the previous session closed at PKR 252.4 per GBP.
Similarly, PKR's value strengthened by 1.4 rupees against EUR which closed at PKR 213.61 at the interbank today.
On another note, within the money market, the overnight repo rate towards the close of the session was 13.50/14.00 percent, whereas the 1-week rate was 13.75/13.85 percent.
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