August 12, 2022 (MLN): Rejoicing the positive sentiment prevailing in the market amidst clarity on the IMF front, the Pakistani rupee (PKR) gained 8.5 rupees against the US dollar in three consecutive sessions as the currency closed the week's trade at PKR 215.49 per USD.
Maintaining its gaining streak, in today’s session, the local unit has appreciated by 3.4 rupees compared to yesterday's closing of PKR 218.88 per USD.
The rupee endured a range-bound trading session with a band of 50 paisa per USD showing an intraday low offer of 215.50 while in the open market, PKR was traded at 210/213.50 per USD.
The strong appreciation of the rupee reflects an improvement in liquidity in the interbank market on the back of higher export proceeds. In addition to it, positive news flow from the IMF front has also helped market sentiments to remain elevated.
Speaking to Mettis Global, Zafar Paracha, President of Exchange Companies Association of Pakistan (ECAP) said, the SBP’s action against the banks pertaining to the issuance of LCs at self-proclaiming dollar rates which later compelled exporters and importers to revisit their plans, helped PKR to gain its gaining momentum back.
Though the oil prices in the international market have been declining in the absence of an effective strategic move, we would not be able to reap the maximum benefit of the situation.
He also suggested, “If the government takes the required steps in the right direction to improve the role of overseas Pakistani, the country would reap the benefits from remittances which would further prevent the government from taking a loan from international organizations.”
Adding to it, he said that the recent policy of taking back the voting right from overseas Pakistanis in the elections has created a negative impact on the community.
In FYTD, PKR lost 10.64 rupees or 4.94%, while it plummeted by 38.98 rupees or 18.09% against the USD in CYTD. On the other hand, within seven sessions of the ongoing month, the domestic unit has marked a recovery of 11.08%, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 23.89% against the greenback while reaching its lowest at 239.94 on July 28, 2022, and the highest of 164 on August 13, 2021.
Furthermore, the local unit has weakened by 13.58% and 14.75% against EUR and GBP, respectively, since the high on August 20, 2021.
In addition to it, the local unit has also been appreciated by 11.51%, 11.43%, 11.16%, 11.10%, 11.08%, 10.37%, and 9.95% against JPY, GBP, CNY, SAR, AED, EUR, and CHF, respectively in MYTD.
Meanwhile, the currency gained 5.2 rupees against the Pound Sterling as the day's closing quote stood at PKR 262.3 per GBP, while the previous session closed at PKR 267.5 per GBP.
Similarly, PKR's value strengthened by 4.3 rupees against EUR which closed at PKR 221.81 at the interbank today.
On another note, within the money market, the central bank conducted an Open Market Operation (OMO) in which SBP injected Rs545.95 billion for 63 days and Rs157.9bn for 7 days at a 15.11% rate of return accepted per annum.
The overnight repo rate towards the close of the session was 14.75/15%, whereas the 1-week rate was 14.95/15.05%.
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