PKR gains over 5 rupees against USD in a week

October 13, 2023 (MLN): The Pakistani rupee (PKR) appreciated by 5.07 rupees against the U.S. dollar over the week to settle at PKR 277.62 per USD, compared to the previous week's closing of PKR 282.69 per USD.

In today's interbank session, the local unit gained 96 paisa with an intraday high (bid) of 278.5 and a low (ask) of 287.55.

In the open market, the local unit gained 1 rupee as exchange companies quoted the dollar at 274 for buying and 277 for selling, compared to the previous closing of 275 for buying and 278 for selling.

The strengthening of the local currency is attributed to the army-backed crackdown to restrict illegal dollar outflows, coupled with additional measures taken by the government.

To address the issue of Afghan transit trade, Pakistan's Ministry of Commerce recently took a decisive step by imposing a ban on 212 items that were previously being imported into Afghanistan via Pakistan under the Afghan transit trade agreement.

This move, made through a Statutory Regulatory Order (SRO) issued on October 03, was in exercise of the powers conferred by the Imports and Exports (Control) Act, 1950.

Additionally, the FBR has imposed a 10% processing fee on five major categories of Afghan transit commercial goods imported into Afghanistan through Pakistan.

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 five exchange companies of B- Category on Wednesday, underscoring the central bank's commitment to ensuring compliance with regulatory standards.

This comes in addition to the suspension of four exchange companies in the previous month

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; Habib Metropolitation Bank (PSX: HMB), 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 2.85 rupees against the Euro, closing at 293.08 compared to the previous value of 295.94.

The British Pound became cheaper by 3.43 rupees closing at 339.2 compared to 342.63 from a day ago.

The Swiss franc saw losses of 2.97 rupees, closing at 306.46 compared to 309.43 from the previous session.

Against the Japanese Yen, PKR gained 1.29 paisa, closing at 1.855 versus 1.868 a day ago.

The Chinese Yuan lost 17.64 paisa, closing at 37.9956 against 38.172 from the previous session.

The Saudi Riyal closed at 74.01 with a loss of 25.72 paisa from its value of 74.27 a day ago.

The U.A.E Dirham decreased in value by 26.16 paisa from 75.845 a day ago to 75.583.

During the current financial year, PKR has appreciated against the Dollar by 8.37 rupees or 3.01%. While the current calendar year has seen PKR depreciate by 51.19 rupees or 18.44%.

In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched down by 4 bps to 22.47% and 22.72%.

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