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PKR gains over two rupees per USD in intraday trade

PKR gains around 4 paisa against USD
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February 08, 2022 (MLN): Since exporters are offloading their proceeds, the Pakistani rupee (PKR) has gained over two rupees against the US dollar in the interbank market compared to the previous close of PKR 276.28 per USD.  

The local unit was quoted at PKR 274.09/274.84 [11:18 PST] with the trades being reported at 274 per USD while in the open market, PKR is being traded at 277/279.80 per USD.

Meanwhile, Pakistan’s chemical industry imported its first-ever raw material consignment from Saudi Arabia in PKR, paving the way for further imports in the local currency and relieving pressure from the country’s dwindling forex reserves, as per reported by Express Tribune today. 

Speaking at the inaugural session of the two-day “Pakistan Chemical Expo 2023”, Pakistan Chemicals Manufacturers Association (PCMA) Chairman Jai Kumar said, “To exploit the chemical sector, PCMA is not only advocating for long-term petrochemical complex projects but is also introducing bio-economy projects to take full advantage of the resources available in the country.”

Further, experts are of the view that the currency market is expected to remain volatile until the IMF decision.

The currency is experiencing a serious bloodbath since last month amid the absence of fresh inflows, stalled talks with the IMF, and political turmoil. 

According to Bloomberg, millions of dollars are being smuggled into Afghanistan from Pakistan every day, providing some support for the squeezed economy after the US and Europe denied the Taliban regime access to billions in foreign reserves.

For Islamabad, the outflows are exacerbating a rapidly developing economic crisis. Traders and smugglers are bringing as much as $5 million across the border daily, according to Muhammad Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan, a 26-member body of currency dealers. That more than covers as much as $17 million that Afghanistan’s central bank injects into the market each week.

For Pakistan, it’s contributing to the depletion of foreign reserves and adding to the downward pressure on the rupee as the currency tumbles to record lows and the economy teeters on the edge of
collapse.

Pakistan is facing a challenging time, with the rupee's value dropping to record lows and the outflows to Afghanistan exacerbating the situation.

The recent efforts of the exporters and the chemical industry provide some hope, but the outcome of the talks with the IMF and the stability of the political climate will also play a crucial role in the future of the economy.

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Posted on: 2023-02-08T11:07:31+05:00