PKR gains more ground against USD, appreciates by 54 paisa in interbank

August 1, 2022 (MLN): Continuing its recovery, the Pakistani rupee (PKR) managed to gain more ground on Monday, appreciating by 54 paisa against the greenback in today's interbank session as the currency closed the day's trade at PKR 238.84 per USD, against last session's closing of PKR 239.37 per USD.

The rupee traded in a range of one rupee per USD showing an intraday high bid and low offer of 239. Within the open market, PKR was traded at 240/243 per USD.

Ahsan Mehanti, Director of Arif Habib told Mettis Global, "Rupee strengthened on account of government decision to lift import ban on non-essential and luxury items imposed in May 2022."

Meanwhile, speculations over likely current account surplus in July 2022 have also started building confidence in the market, he added. 

On the other hand, Zafar Paracha President of the Exchange Companies Association of Pakistan (ECAP) is of the view that PKR is undervalued as given the economic fundamentals of Pakistan, the local unit should not be traded beyond Rs190 per USD. 

Finance Minister Miftah Ismail in a joint statement with SBP said that the Rupee is expected to gradually strengthen as the current account deficit is expected to narrow going forward given the surge in the import bill is brought under control.

“Pakistan sees a way out of its current economic crisis without descending into default, thanks to progress on a stalled International Monetary Fund loan as well as spending cuts, Miftah Ismail in its latest interview to Bloomberg said. 

Last week, the local unit remained under severe pressure from bleak macros and political heat as it marked the historic low of 240 per US dollar in the intraday trade on Thursday.

In CYTD, the local unit plummeted by Rs62.32 or 26.09% against the USD while it registered a decline of 14.23% against the greenback in FYTD, as per data compiled by Mettis Global.

During the last 52 weeks, PKR lost 31.66% against the greenback while reaching its lowest at 239.94 on July 28, 2022, and the highest of 163.22 on August 5, 2021.

Furthermore, the local unit has weakened by 21.75% and 23.45% against EUR and GBP, respectively since its high on August 20, 2021.

In addition to it, the performance of the local unit has improved against other major currencies today as the currency gained 0.57%, 0.23%, 0.22%, and 0.06% against CNY, AED, SAR, and GBP respectively. While it lost 0.12% of value against JPY and 0.05% against CHF. 

Meanwhile, the currency gained 18 paisa against the Pound Sterling as the day's closing quote stood at PKR 292.11 per GBP, while the previous session closed at PKR 292.29 per GBP.

On the other hand, PKR's value weakened by 13 paisa against EUR which closed at PKR 244.94 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 15/15.25%, whereas the 1-week rate was 14.95/15.05%.

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