PKR gains over 5 rupees against USD in a week

October 06, 2023 (MLN): The Pakistani rupee (PKR) appreciated by over 5 rupees against the U.S. dollar this week to settle the trade at PKR 282.68 per USD, compared to the previous week’s closing of PKR 287.74 per USD.

The local unit saw an intraday high (bid) of 283.55 and a low (ask) of 282.55 in today's session.

In the open market, the local unit gained 1 rupee as exchange companies quoted the dollar at 280 for buying and 283 for selling, compared to the previous closing of 281 for buying and 283.8 for selling.

It is pertinent to note that the local unit has finished the month of September marked by second-best performance since 2014 in percentage terms, gaining 6.19% against the US dollar and earning the coveted title of the best-performing currency in the world for the month.

In stark contrast to the bleak macros that had plagued the Pakistani rupee, the army-backed crackdown on the illegal dollar trades has significantly helped the PKR.

Moreover, recent reforms introduced by the State Bank of Pakistan (SBP) to consolidate and transform various types of exchange companies into a single category with a well-defined mandate and higher capital requirements are also enhancing transparency.

To note, SBP suspended the authorization of four exchange companies in September, underscoring the central bank's commitment to ensuring compliance with regulatory standards.

These reforms also apply to the banks actively engaged in foreign exchange business, mandating them to set up wholly owned ECs to address the legitimate foreign exchange needs of the general public.

Following the guidelines of the central bank, certain banks such as; Bank Al Falah Limited (BAFL), Faysal Bank Limited (PSX: FABL),  Allied Bank Limited (PSX: ABL), Bank Al Habib Limited (PSX: BAHL), MCB Bank Limited (PSX: MCB), Meezan Bank Limited (PSX: MEBL), and United Bank Limited (PSX: UBL), have decided to establish their own exchange company.

In comparison to major currencies, PKR gained 94 paisa against the Euro, closing at 282.69 compared to the previous value of 283.62

The British Pound became expensive by 57 paisa closing at 344.74 compared to 344.16 from a day ago.

The Swiss franc saw gains of 36 paisa, closing at 309.66 compared to 309.3 from the previous session.

Against the Japanese Yen, PKR gained 2.9 paisa, closing at 1.898 versus 1.9033 a day ago.

The Chinese Yuan lost 13 paisa, closing at 38.7163 against 38.8446 from the previous session.

The Saudi Riyal closed at 75.37 with a loss of 25 paisa from its value of 75.62 a day ago.

The U.A.E Dirham decreased in value by 25 paisa from 77.217 a day ago to 76.964.

During the current financial year, PKR has appreciated against the Dollar by 3.30 rupees or 1.17%. While the current calendar year has seen PKR depreciate by 56.25 rupees or 19.90%.

In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched down by 10 bps to 22.55% and 22.88%.

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