PKR on gaining spree, up by 55 paisa against greenback

March 06, 2023 (MLN): The Pakistani rupee (PKR) on Monday saw a promising surge against the US dollar, appreciating by 55 paisa in today's interbank session as the currency settled at PKR 277.92 per USD, compared to the previous session's closing rate of PKR 278.46 per USD.

Throughout today’s session, the local unit remained volatile and traded in a band of eight rupees, showing an intraday high bid of 279 and low offer of 273 while in the open market, PKR was traded at 276.5/280.5 per USD.

Thanks to positive optimism to the International Monetary Fund (IMF) front and roll-over of Chinese loans.

An agreement at the staff level (SLA) is expected to be signed with the IMF before the end of this week, according to recent reports.

The government has met all the IMF's reform requirements, with reserve building being one of the primary conditions. This was reflected in the recent rollover of a $1.3 billion loan by the Industrial and Commercial Bank of China Ltd.

SBP also received $700 million from China in February which provided a much-needed boost to depleting foreign exchange reserves.

At present, the foreign exchange reserves held by the SBP increased by $556 million or 17.05% WoW to $3.81 billion during the week ended on February 24, 2023, marking the third consecutive increase on a weekly basis. 

In FYTD, PKR lost 73.07 rupees or 26.29%, while it plummeted by 51.48 rupees or 18.53% against the USD in CYTD. On the other hand, within the last seven sessions, the local unit moved down by 6.47%, as per data compiled by Mettis Global.

Similarly, PKR's value weakened by 16 paisa against EUR which closed at PKR 295.54 at the interbank today.

Alternatively, the currency lost 62 paisa to the Pound Sterling as the day's closing quote stood at PKR 334.35 per GBP, while the previous session closed at PKR 333.72 per GBP.

On another note, within the money market, the central bank conducted an Open Market Operation (OMO), in which it injected a total of Rs465.1 billion into the market at a 20.05% rate of return for 3-day tenure.

The overnight repo rate towards the close of the session was 20.1%/20.4%, whereas the 1-week rate was 19.65%/19.75%.

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