PKR falls by 94 paisa against greenback

February 01, 2023 (MLN): Pakistani rupee has depreciated by 94 paisa against US Dollar in today's interbank session as the currency settled the day's trade at PKR 268.83 per USD, against yesterday's closing of PKR 267.89 per USD.

During the session, the rupee traded in a band of Rs4.76 per USD showing an intraday high bid of 269.75 and low offer of 266.50 while in the open market, PKR was traded at 270/273 per USD.

Interbank closing #ExchangeRate for todayhttps://t.co/dXkGah78kO pic.twitter.com/TFFEDfIqvS

— SBP (@StateBank_Pak) February 1, 2023

On Tuesday, the rupee reported a minor gain of 1.7 rupees against the US dollar, which is attributed to the smooth supply of dollars in the market as exporters started offloading dollars due to higher rates.

At present, Fund officials are in Pakistan for technical and policy discussions to revive the $7 billion Extended Fund Facility (EFF).

“We believe that the rupee’s weakness still has further to run particularly with Pakistan’s balance of payments positions likely to remain weak for several more months”, Fitch Solutions predicted.

Fitch further added that a continued weakening in the rupee will have broader economic implications too in the near term, and it could exacerbate imported inflationary pressure and may eventually result in steeper policy rate hikes from the SBP.

“Pakistan’s economy to contract by 0.3% in the fiscal year 2022-23”, Fitch report noted.

The agency reported that the rupee’s devaluation was triggered by the decision among local foreign exchange companies to remove the self-imposed cap on the exchange rate on January 25.

In FYTD, PKR lost 63.98 rupees or 23.80%, while it plummeted by 14.11% against the USD in the last seven sessions, as per data compiled by Mettis Global.

Meanwhile, the currency lost 32 paisa to the Pound Sterling as the day's closing quote stood at PKR 331.16 per GBP, while the previous session closed at PKR 330.84 per GBP.

Similarly, PKR's value weakened by 2.1 rupees against EUR which closed at PKR 292.65 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 16.25%/16.50%, whereas the 1-week rate was 17.05%/17.15%.

Copyright Mettis Link News