PKR on a losing streak, weakens by 1.1 rupees against USD

November 07, 2023 (MLN): The Pakistani rupee (PKR) depreciated by 1.1 rupees against the US dollar in Tuesday's interbank session as the currency settled the trade at PKR 286.39, compared to the previous day's closing of PKR 285.29 per USD.

The local unit saw an intraday high (bid) of 287.09 and a low (ask) of 285.65.

In the open market, the local unit lost 1.3 rupees as exchange companies quoted the dollar at 285.3 for buying and 285.5 for selling, compared to the previous closing of 284 for buying and 287 for selling.

To note, this marks the twelfth consecutive session in which the local currency has lost its value against the U.S. Dollar.

This decline in the value of the local unit is attributed to the increased demand for foreign currency in the domestic economy.

It is important to mention that Pakistan's trade deficit for the month of October widened by over 38% MoM to $2.099 billion compared to a deficit of $1.518bn from the previous month.

According to Goldman Sachs's analyst, the performance of the local currency has concluded in the backdrop of financing risks and the upcoming elections.

"The recent appreciation of the Pakistani rupee will likely be short-lived, given soaring interest costs and only short-term arrangements with the IMF and bilateral financing to support the external balance," analysts led by Kamakshya Trivedi wrote in a report. 

Moreover, the local market will continue to require a premium for Pakistan's rupee ahead of the elections.

In a recent development, the review mission of the International Monetary Fund (IMF) last week appreciated Pakistan's government to meet the targets set by the fund for the first quarter of the fiscal year 2023-24. 

In comparison to major currencies, PKR gained 38.89 paisa against the Euro, closing at 306.21 compared to the previous value of 306.6.

The British Pound became cheaper by 1.11 rupees, closing at 352.54 compared to 353.64 from a day ago.

Swiss franc saw gains of 9.51 paisa, closing at 318.28 compared to 318.19 from the previous session.

Against the Japanese Yen, PKR gained 0.38 paisa, closing at 1.905 versus 1.908 a day ago.

The Chinese Yuan gained 12.11 paisa, closing at 39.318 against 39.1969 from the previous session.

The Saudi Riyal closed at 76.34 with a gain of 29.53 paisa from its value of 76.05 a day ago.

The U.A.E Dirham increased in value by 30.26 paisa from 77.672 a day ago to 77.975.

During the current financial year, PKR has depreciated against the Dollar by 40 paisa or 0.14%. While the current calendar year has seen PKR depreciate by 59.96 rupees or 20.94%.

In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched up by 2 bps to 21.46% and 21.71%.

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