PKR notches up 9 straight weeks of appreciation against USD

January 12, 2024 (MLN): The Pakistani rupee (PKR) marked its 9th consecutive weekly victory by appreciating 1.04 rupees against the US dollar this week to settle at PKR 280.36, as compared to the previous week's closing of PKR 281.4 per USD.

In today's session, the local unit gained 75.4 paisa and witnessed an intraday high (bid) of 281.19 and a low (ask) of 280.5.

In the open market, Exchange Companies quoted the dollar at 279.15 for buying and 281.50 for selling.

The home unit has found stable ground amid increased liquidity in the foreign exchange market due to tighter enforcement of regulations, a shrinking money supply, a balance of payments surplus on account of low import demand, and a moratorium on Chinese debt repayments.

In a noteworthy development, the Executive Board of the International Monetary Fund (IMF) has successfully concluded the first review of Pakistan's economic reform program today, which is backed by the IMF's Stand-by Arrangement (SBA).

This approval paves the way for an immediate disbursement of SDR 528 million, equivalent to around $700m, bringing the total disbursements under the SBA to a substantial $1.9 billion.

Consequently, investors' confidence in the economy has been further bolstered, contributing significantly to the upward trend of the PKR against the mighty Dollar.

However, the Fund further highlighted that although economic activity has stabilized the outlook remains challenging and dependent on the implementation of sound policies. 

In comparison to major currencies, PKR gained 78.58 paisa against the Euro, closing at 307.85 compared to the previous value of 308.63.

The British Pound became cheaper by 58.38 paisa, closing at 358.18 compared to 358.77 from a day ago.

Swiss franc saw losses of 1.41 rupees, closing at 329.08 compared to 330.49 from the previous session.

Against the Japanese Yen, PKR lost 0.09 paisa, closing at 1.934 versus 1.933 a day ago.

The Chinese Yuan lost 12.33 paisa, closing at 39.1391 against 39.2624 from the previous session.

The Saudi Riyal closed at 74.75 with a loss of 20.5 paisa from its value of 74.96 a day ago.

The U.A.E Dirham decreased in value by 20.64 paisa from 76.54 a day ago to 76.333.

During the current financial year, PKR has appreciated against the Dollar by 5.63 rupees or 2.01%. While the current calendar year has seen PKR appreciate by 1.5 rupees or 0.54%.

In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched down by 6 bps to 20.67% and 20.92%.

The State Bank of Pakistan (SBP) conducted a reverse repo and Shariah Compliant Modarabah-based Open Market Operation (OMO) today, in which it cumulatively injected a total of Rs6 trillion into the market.  

The breakup shows that  Rs5.79tr was injected through reverse repo OMO, Meanwhile, the remaining Rs210 billion was injected through Shariah-compliant Modarabah-based OMO.

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