PKR marks 6th straight victory against USD

January 10, 2024 (MLN): The Pakistani rupee (PKR) appreciated by 9.22 paisa against the US dollar in Wednesday's interbank session as the currency settled the trade at PKR 281.13 per USD, compared to the previous session's closing of PKR 281.22 per USD.

The currency saw an intraday high (bid) of 281.19 and a low (ask) of 281.2.

In the open market, Exchange Companies quoted the dollar at 279.79 for buying and 282.18 for selling.

This marks the sixth consecutive victory for the home unit after it broke its 13-day upside streak against the greenback.

It is crucial to note that the domestic currency concluded the first week of 2024 by extending its upward trend for the eighth consecutive week.

The positive market sentiments, attributed to the expectations of the approval of the second loan tranche worth $700 million by the International Monetary Fund (IMF), continue to benefit the local currency.

It is worth highlighting that Pakistan is scheduled to meet the IMF tomorrow for the approval of this tranche.

The data released today by the central bank for the Workers' remittances figure showed that foreign currency inflows increased significantly by 5.44% MoM and 13.42% YoY to $2.38 billion in December.

The primary reason attributed to this increase is the government-led crackdown against speculators, hoarders, and smugglers, which addressed illegal dollar outflows and effectively reduced the gap between interbank and open markets.

As a result, the spread between interbank and open market rates, which reached a high of around 9% in May 2023 has now almost vanished, well below the IMF's 1.25% recommended limit.

Foreign workers have been drawn towards formal channels due to lower gaps and decreased black market activities.

Moreover, the latest trade numbers released by the Pakistan Bureau of Statistics (PBS) have also shown satisfactory results as the country's trade deficit reduced significantly by 13.43% MoM and 40.13% YoY in December.

In comparison to major currencies, PKR gained 94.44 paisa against the Euro, closing at 307.16 compared to the previous value of 308.11.

The British Pound became cheaper by 1.38 rupees closing at 356.98 compared to 358.36 from a day ago.

The Swiss franc saw losses of 1.86 rupees, closing at 329.85 compared to 331.71 from the previous session.

Against the Japanese Yen, PKR gained 1.24 paisa, closing at 1.9396 versus 1.952 a day ago.

The Chinese Yuan lost 9.25 paisa, closing at 39.19 against 39.29 from the previous session.

The Saudi Riyal closed at 74.96 with a loss of 2.66 paisa from its value of 74.99 a day ago.

The U.A.E Dirham decreased in value by 2.62 paisa from 76.54 a day ago to 76.57.

During the current financial year, PKR has appreciated against the Dollar by 4.86 rupees or 1.73%. While the current calendar year has seen PKR appreciate by 73.09 paisa or 0.26%.

In the Money Market, the benchmark 6 Month Karachi Interbank Bid and Offer rates inched down by 4 bps to 21.06 and 21.31%.

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