PKR loses grip against USD, down by 3 rupees

March 01, 2023 (MLN): The optimism on the IMF front has finally disappeared owing to the longer-than-expected delay which forced the Pakistani rupee (PKR) to loosen its grip against the US dollar on Wednesday as it depreciated by three rupees compared to the previous close of PKR 261.5 per USD. 

The local unit was quoted at PKR 264.50/266 [12:00 PST] with the trades being reported at 264.5 per USD while in the open market, PKR is being traded at 265/269 per USD.

The pressure on PKR in the interbank market is attributed to Moody's recent report wherein it has downgraded the country's local and foreign currency issuer and senior unsecured debt rating from Caa1 to Caa3.

In addition to this, according to the news reports, the fund has set forth four prior actions that need to be taken before reaching a staff-level agreement (SLA), which has further heightened concerns among investors.

The State Bank of Pakistan (SBP) has arranged a monetary policy committee meeting tomorrow, which is likely to discuss the recent developments and their impact on the economy.

Meanwhile, experts are predicting that an increase in interest rates could be on the cards to address the economic challenges faced by the country. 

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