August 26, 2022 (MLN): On the back of drying up foreign exchange reserves and rising demand for dollars, the Pakistani rupee (PKR) has lost 6 rupees against the greenback to conclude the week at PKR 220.66 per USD.
Within today’s session, the local unit depreciated by 1.2 rupees against the US dollar while enduring a range-bound trading session with a band of 1.25 rupees per USD showing an intraday high of 220.50 and intraday low offer of 219.60. Meanwhile, in the open market, PKR was traded at 227/230 per USD.
In the backdrop of dismal macros as the foreign exchange reserves have declined by $92million in a week to stand at $13.5 billion and foreign direct investment plunged to $59mn in July 2022, the local currency is under severe pressure.
The cherry on top, the demand for dollars in the open market has surged due to the newly enforced law by UAE for Pakistani travelers to have 5,000 dirhams along with a valid work visa and a return ticket.
However, Zafar Paracha, President of Exchange Companies of Pakistan attributed this increase in dollar demand to the element of smuggling.
Experts are also of the view that the government's decision of lifting a ban on imports has also played a vital role in the surging demand for dollars.
This development came after when UAE authorities deported 80 Pakistanis for having fake return tickets and analysts are of the view that the surging demand for AED would continue to pressure PKR.
Meanwhile, Malik Boston, President of the Forex Association of Pakistan told Mettis Global, “Around 20 million USD is being transported from Pakistan to Afghanistan as its international accounts have been freeze.”
He also clarified that there is no element of smuggling exists as the Afghanis who take dollars with them from Pakistan have dual nationality. Hence, they are allowed to carry a certain amount of dollars with them.
During the day, the currency lost 34 paisa or 0.13% to the Pound Sterling as the day's closing quote stood at PKR 260.11 per GBP, while the previous session closed at PKR 259.78 per GBP. Similarly, PKR's value weakened by 74 paisa or 0.33% against EUR which closed at PKR 220.04 at the interbank today.
The rupee also weakened against SAR, AED, CNY, CHF, and JPY by 0.65%, 0.56%, 0.41%, 0.32%, and 0.24%, respectively.
In FYTD, PKR lost 15.81 rupees or 7.17%, while it plummeted by 44.14 rupees or 20% against the USD in CYTD, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 24.94% against the greenback while reaching its lowest at 239.94 on July 28, 2022, and the highest at 165.62 on August 27, 2021.
Furthermore, the local unit has weakened by 11.95% against EUR when it was highest on March 07, 22, while the rupee weakened by 12.79% against GBP since its high on August 27, 2021.
On another note, within the money market, the State Bank of Pakistan (SBP), on Friday, injected Rs317.8 billion into the money market through reverse repo purchase and Shariah-compliant mudarabah-based open market operation.
As per the SBP statement, through reverse repo purchase operation, the injected amount was Rs241.8bn of which Rs68.25bn was for 3 days and Rs173.5bn was for 63 days at a 5.14% rate of return.
While, the amount injected through Shariah-compliant mudaraba-based operation was Rs76bn, of which Rs69bn was for 7 days at 15.14% return and Rs7bn was for 63 days at the rate of 15.2%.
A total of 23 bids were placed by participants for reverse repo purchase to raise Rs473.7bn. However, SBP accepted of which 6 bids worth Rs68.25bn for 7 days injection and 12 bids worth Rs173.55bn for 63 days.
The overnight repo rate towards the close of the session was 15.00/15.25%, whereas the 1-week rate was 15.15/15.25%.
Copyright Mettis Link News
Posted on:2022-08-26T17:11:56+05:00
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