February 18, 2022 (MLN): The struggling unit has lost its battle against the US dollar in today’s interbank session as the Pakistani rupee (PKR) settled the week’s trade at 175.86 per USD, sliding by 47 paisa.
Throughout the day, PKR traded in a range of 50 paisa per USD observing an intraday high bid of 175.95 and an intraday low offer of 175.50.
The outgoing week remained choppy for the local unit as it lost 1.2 rupees against the greenback, as the previous week was concluded at PKR 174.71 per USD.
It is pertinent to mention that PKR managed to offset some of the previous losses as it managed to hold its ground in the previous two sessions, observing a gain of 39 paisa.
Coupled with its traditional issues such as trade deficit, import bill, shrinking reserves and speculative elements, the domestic unit has also been hurting on Russia Ukraine conflict.
Likewise, other Asian currencies, PKR also felt some jolt and as per money market experts, the adverse impact will be seen in months to come where Pakistan will have to pay huge import bill due to the rise in commodity prices in the international market.
However, on the news of pulling back some of the Russian troops from the Ukraine border on Tuesday had started cooling down the prices of oil and gold in the international market.
But, later on shelling in Ukraine renewed fear in the market which has pumped prices in the international market further to prolong the bull cycle.
According to Asad Rizvi, the former Treasury Head at Chase Manhattan, “Despite recent inflows, the pressure has not subsided due to higher import bill.”
Surging oil prices is adding to the woes in the shape of PKR/$ mismatch that has created a gap that is keeping local currency under pressure, he added.
Meanwhile, the local unit has lost Rs18.31 against the USD from July’21 to date, Whereas, the rupee appreciated by 0.65 paisa in CY22, with the month-to-date (MTD) position showing a gain of 0.48%, as per data compiled by Mettis Global.
However, the performance of PKR remained comparatively better against major currencies during one month as the local unit appreciated by 2.28%, 1.62%, 1.46%, and 1.41% against AUD, CAD, CNY, and GBP, respectively. On the other hand, PKR has depreciated by 0.78% against EUR and lost some ground by 0.35% against CHF.
Within the Open Market, PKR was traded at 176.50/177.50 per USD.
Meanwhile, the currency lost 1.4 rupees to the Pound Sterling as the day's closing quote stood at PKR 239.65 per GBP, while the previous session closed at PKR 238.24 per GBP.
Similarly, PKR's value weakened by 1 rupee against EUR which closed at PKR 200.01 at the interbank today.
On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation (OMO) in which it injected Rs2 trillion into the market for 7 days at 9.82 percent.
The overnight repo rate towards the close of the session was 9.80/9.95 percent, whereas the 1-week rate was 9.95/10.05 percent.
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