PKR falls by 24 paisa per USD in interbank market

January 19, 2023 (MLN): Maintaining its losing streak, the Pakistani rupee (PKR) shed 24 paisa against the greenback in today's interbank session as the currency settled the trade at PKR 229.15 per USD compared to PKR 228.91 per USD.

Within today’s session, the local unit traded in a band of 60 paisa per USD showing an intraday high bid of 229.25 and low offer of 228.90 while in the open market, PKR was traded at 239.6/240.07 per USD.

The depreciation spell of a local currency shows that there is no respite unless IMF comes for a rescue. The only bottleneck behind the delay in IMF’s deal is the continuous delay in complying with the fund’s conditions.

This resulted in prevailing economic uncertainty for international investors in Pakistan. As per the latest data revealed by the central bank, the inflow of foreign direct investment (FDI) into Pakistan during 1HFY23 plunged by 58.7% YoY to $461 million, compared to $1.11 billion during the same period last year.

In December 2022 alone, the FDI turned negative as the total outflows stood at $17mn compared to 229.8mn inflows in December 2021.

While the current account deficit (CAD) for 1HFY23 stood at $3.67 billion, improving by 60% YoY as compared to 1HFY22. In the month of December 2022, CAD narrowed by 78% YoY to $400n whereas, on monthly basis, it worsened by 59% compared to $252mn in November 2022.

In FYTD, PKR lost 24.3 rupees or 10.61%, while it plummeted by 0.44% against the USD in the last seven sessions, as per data compiled by Mettis Global.

Alternatively, the currency gained 2 paisa against the Pound Sterling as the day's closing quote stood at PKR 282.63 per GBP, while the previous session closed at PKR 282.65 per GBP.

Similarly, PKR's value strengthened by 74 paisa against EUR which closed at PKR 247.87 at the interbank today.

On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation (OMO) today, in which it moped up Rs593.8bn into the market for one day at 15.95%.

The overnight repo rate towards the close of the session was 16.75%/16.9%, whereas the 1-week rate was 15.20%/15.30%.

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