PKR makes modest recovery, closes at 201.52 per USD

June 08, 2022 (MLN): After hitting an all-time low of 202.83 yesterday, the Pakistani rupee (PKR) made a modest recovery against US Dollar (USD) in today's interbank session. It gained 1.3 rupees, closing at 201.52 per USD, supported by the expectations of a revival of the International Monetary Fund (IMF)’s seventh review in the coming days.

The State Bank of Pakistan (SBP) meeting with commercial banks on exchange rate destabilization was cited as one of the reasons for the rupee’s gain.

In its downward journey this fiscal year, the rupee has been facing sharp fluctuations, providing enough room for speculators to maximize their benefits, said Zafar Paracha, President of Exchange Companies Association of Pakistan (ECAP) to Mettis Global.

Commenting on the same, Arif Habib Commodities CEO Ahsan Mehanti told Mettis, "Speculation in markets has lingered over the past few days, which was driving the rupee’s decline.”

“The catalyst for external imbalances is the resumption of the IMF program”, he noted.

Talking about the outlook of local currency, Fahad Irfan Head of Research at Alfalah CLSA Securities said “Once IMF resumes Extended Fund Facility for Pakistan, we will see the external stability that will also unlock funds from other funding avenues. This will help shore up our foreign exchange reserves, which in turn, provide support to falling PKR.”

From July’21 to date, the local unit has lost Rs43.98 against the USD. Similarly, the rupee fell by Rs25 in CYTD, with the month-to-date (MTD) position showing a decline of 1.52%, as per data compiled by Mettis Global.

During the last 52 weeks, PKR lost 22.74% against the greenback while reaching its lowest at 202.83 yesterday and the highest of 155.69 on June 9, 2021.

Furthermore, the local unit has weakened by 13.27% since its high on July 02, 2021, against EUR while, it has dropped by 13.93% against GBP since its high on July 02, 2021.

In addition, the performance of PKR remained bleak in the last 30 days as it weakened by 6.49%, 8.52%, 8.79%, 8.42%, 5.14%, 6.94% and 7.75% against USD, EUR, GBP, CHF, JPY, SAR and CNY.

In today's trade, the rupee endured a highly volatile trading session with quotes being recorded in a range of 3 rupees per USD showing an intraday high bid of 202.50 and an intraday low offer of 200.25.

Within the Open Market, PKR was traded at 200/202.50 per USD.

Meanwhile, the currency gained 48 paisa against the Pound Sterling as the day's closing quote stood at PKR 252.44 per GBP, while the previous session closed at PKR 252.92 per GBP.

Similarly, PKR's value strengthened by 1.3 rupees against EUR which closed at PKR 215.36 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 13.00/13.25 percent, whereas the 1-week rate was 13.70/13.80 percent.

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