June 02, 2023 (MLN): The Pakistani rupee (PKR) lost 52 paisa against the mighty dollar during the outgoing week as the local unit settled the week at PKR 285.68 per USD compared to the previous week's close at PKR 285.15 per USD.
In today's session, the local unit depreciated by 29 paisa against the US dollar in the interbank session compared to the previous session's closing of PKR 285.38 per USD.
Throughout today’s session, the local unit traded in a band of 80 paisa, showing an intraday high bid of 285.9 and a low offer of 285.3 per USD while in the open market, the dollar was traded at 290/300 per USD.
Market talks suggest that the narrowing difference between interbank and open market rates is likely to continue.
In the open market, PKR snapped its long losing streak yesterday and made a strong comeback, appreciating by 19 rupees, attributed to the SBP's decision to allow Authorized Dealers (ADs) to purchase US dollars from Interbank rates.
The decision was appreciated by Malik Bostan, President of the Forex Association of Pakistan, and Asad Rizvi, the former Treasury Head at Chase Manhattan Bank.
However, Malik Boston, stated that this effect would be temporary and last until Tuesday when the bank's forward deals are settled.
Similar sentiments were expressed by another analyst, stating that pressures on the external side remain as the country’s import cover still remains close to one month, while the debt repayment schedule also remains hefty.
Furthermore, Malik Boston mentioned that the market's high level of uncertainty has led participants to be willing to buy the dollar at 300 PKR, causing significant volatility this week.
According to Malik Boston, the actual value of the dollar in the open market ranges between 290 and 295 PKR.
Asad Rizvi stated that the gap between the interbank and open market was temporary and created due to added Afghanistan buying and the annual Islamic pilgrimage (Hajj).
Asad Rizvi is of the view that if IMF approves the loan tranche, the PKR will continue to appreciate.
Meanwhile, the currency lost 3.1 rupees to the Pound Sterling as the day's closing quote stood at PKR 357.87 per GBP, while the previous session closed at PKR 354.72 per GBP.
Similarly, PKR's value weakened by 2.9 rupees against EUR which closed at PKR 307.53 at the interbank today.
In FYTD, PKR lost 80.82 rupees or 28.29%, while it plummeted by 59.24 rupees or 20.74% against the USD in CYTD. Within the last seven sessions, the local unit moved down by 0.18%, as per data compiled by Mettis Global.
On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation (OMO) today, in which it injected a total of Rs3.58 trillion, the highest-ever injection into the market at 21.02%.
The overnight repo rate towards the close of the session was 20.50/21.00%, whereas the 1-week rate was 20.95/21.05%.
Copyright Mettis Link News
Posted on: 2023-06-02T15:59:42+05:00
