PKR in free fall

December 08, 2021 (MLN): The inexorable slide has taken the Pakistani rupee (PKR) to its new all-time low against the US dollar as the currency closed the trade at PKR 177.43, depreciating by 64 paisa.

On Tuesday, the local unit lost 31 paisa to settle the trade at PKR 176.79 per USD.

The domestic unit took a continuous beating on the back of widening trade deficit and depleting foreign reserves which have amplified the demand for the dollar in the interbank market.

The rupee endured a volatile trading session with quotes being recorded in a range of 90 paisa per USD showing an intraday high bid of 177.60 and an intraday Low offer of 176.70.

As per the Exchange Companies Association of Pakistan (ECAP), PKR lost 60 paisa for buying and 70 paisa for selling over the day closed at 178.3 and 179.5 respectively in the open market.

The local unit has depreciated by 11.21% or PKR 19.88 in the fiscal year-to-date against the USD. Similarly, the rupee has weakened by 9.92% or PKR 17.59 in CY21, with the month-to-date (MTD) position showing a decline of 0.96%, as per data compiled by Mettis Global.

Meanwhile, the currency lost 6 paisa to the Pound Sterling as the day's closing quote stood at PKR 234.92 per GBP, while the previous session closed at PKR 234.87 per GBP.

Similarly, PKR's value weakened by 66 paisa against EUR which closed at PKR 200.24 at the interbank today.

On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation in which it injected Rs.259.45 billion for 2 days at 9.15 percent.

The overnight repo rate towards close of the session was 9.25/9.50 percent, whereas the 1-week rate was 9.15/9.25 percent.

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