June 02, 2022 (MLN): Maintaining its gaining spree on the hope of IMF’s tranche, the Pakistani rupee (PKR) has strengthened by 28 paisa against the US dollar in today's interbank session as the currency settled the trade at 197.59 per USD.
On Wednesday, the local unit closed the session at PKR 197.87 per USD.
During the session, the rupee traded in a range of 45 paisa per USD showing an intraday high bid of 197.80 and an intraday low offer of 197.50.
Within the Open Market, PKR was traded at 196/198 per USD.
PKR continues its upward journey recovering from its record all-time lows on the news of the government's decision to partially roll back fuel subsidy.
“Despite robust tax collection, our fiscal deficit will remain high due to imports,” Asad Rizvi, the Former Treasury Head at Chase Manhattan Bank said in a tweet.
BOP is being monitored, but foreign exchange reserves are far below the standard 3-months requirement. All eyes are on IMF, he added.
From July’21 to date, the local unit has lost Rs40.04 against the USD. Similarly, the rupee fell by Rs21.07 in CYTD, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 21.75% against the greenback, reached its lowest at 202 on May 26, 2022, and touched its high of 154.61 on June 4, 2021.
Furthermore, the local unit has weakened by 11.52% since its high on July 02, 2021, against EUR while, it has dropped by 12.28% against GBP since its high on July 02, 2021.
In addition, the performance of PKR improved in seven sessions as it strengthened by 4.77%, 2.28%, 2.23%, 2.22%, and 1.45% against JPY, EUR, AED, SAR, and CNY, respectively.
Meanwhile, the currency gained 1.2 rupees against the Pound Sterling as the day's closing quote stood at PKR 247.68 per GBP, while the previous session closed at PKR 248.91 per GBP.
Similarly, PKR's value strengthened by 86 paisa against EUR which closed at PKR 211.21 at the interbank today.
On another note, within the money market, the overnight repo rate towards the close of the session was 14.40/14.50 percent, whereas the 1-week rate was 13.75/13.85 percent.
Owing to the expectation of another rate hike following the spiraling inflation, the cut-off yields of T-bills were increased by up to 75 basis points in the auction conducted by the central bank. It raised Rs792 billion through the auction of three, six, and twelve-month T-bills against the target of Rs750bn.
To note, the cut-off yields for 3-month T-bills saw a jump of 75bps to stand at 15.25%, the highest since July 15, 1998. The 6-month T-bills is also standing at 15.25%, the highest since August 8, 1998.
Similarly, the 12-month T-bills’ cut-off yields are also clocked in at 15.50%, it's all-time high since August 19, 2022.
“However, on the PKRV yields front, yields have eased off-post May 2022 MPS within the range of 13bps-31bps for 3M, 6M and 1Yr tenors, showing an inversion in the midst of upping currency parity by more than Rs5.5 during last 1 week to PKR197/USD in the interbank,” a research note by Adam Securities noted.
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