PKR nosedives by over 2 rupees per USD

June 06, 2022 (MLN): Continuing its downward slide, the Pakistani rupee (PKR) has witnessed a sharp decline against the US dollar in today's interbank session as the currency closed the trade at PKR 200.06 per USD, plummeting by 2.1 rupees.

In the previous session, the local unit had settled the trade at PKR 197.92 per USD. 

This sharp decline is attributed to the delay of the fresh inflow of foreign exchange reserves while the present reserves are continuously depleting (currently standing at $15.77bn). Thus, the market has once again lost confidence and facing a panic-like situation. 

According to Asad Rizvi, the former Treasury Head at Manhattan, “Moody's on Thursday downgraded the outlook from stable to negative due to external financing factor, the market reacted that saw PKR dipping. Closure of market in the Middle East also added pressure.”

While choppy conditions remain intact until BUDGET & IMF approve the loan, he added.

The rupee endured a choppy trading session with quotes being recorded in a range of 2.35 rupees per USD showing an intraday high bid of 200.30 and an intraday low offer of 198.35.

Within the open market, PKR was traded at 199/200.50 per USD.

From July’21 to date, the local unit has lost Rs42.52 against the USD. Similarly, the rupee fell by Rs23.55 in CYTD, with the month-to-date (MTD) position showing a decline of 0.80%, as per data compiled by Mettis Global.

During the last 52 weeks, PKR lost 23.37% against the greenback, reached its lowest at 202 on May 26, 2022, and touched its high of 155.31 on June 7, 2021.

Furthermore, the local unit has weakened by 13.08% since its high on July 02, 2021, against EUR while, it has dropped by 13.46% against GBP since its high on July 02, 2021.

In addition, the performance of PKR remained bleak in CYTD as it weakened by 11.85%, 11.77%, 7.99%, 7.24%, 7.10%, and 5.09%, against SAR, AED, CNY, CHF, EUR, and GBP, respectively. On the hand, the local unit has appreciated by 0.22%  against JPY in the same period. 

Meanwhile, the currency lost 2 rupees to the Pound Sterling as the day's closing quote stood at PKR 251.06 per GBP, while the previous session closed at PKR 249.03 per GBP.

Similarly, PKR's value weakened by 2 rupees against EUR which closed at PKR 214.89 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 13.25/13.75 percent, whereas the 1-week rate was 13.75/13.85 percent.

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