August 31, 2022 (MLN): After spending a month-long period in hot waters, the Pakistani rupee (PKR) witnessed a respite in the outgoing month as the currency gained around twenty rupees against the greenback to settle the month of August 2022, at 218.75 per USD.
Within today’s session, the rupee appreciated by 1.4 rupees after being traded in a range of 1.84 rupees showing an intraday high bid of 219.83 and an intraday low offer of 218.49 while in the open market, PKR was traded at 217.50/219.50 per USD.
Thanks to the improving dollar liquidity in the interbank market as majority of the exporters proceeded with their receipts when the dollar was at its peak against PKR.
Cherry on the top, the notable decline in imports which narrowed down the trade deficit has played a vital role in order to improve market sentiments. Meanwhile, the positive signal from IMF has also played a catalyst role in the strong appreciation of PKR earlier this month.
During the month, the news pertaining to the United Arab Emirates (UAE)’s interest to invest $1 billion in Pakistani companies across various sectors and Finance Minister Miftah Ismail’s latest statement wherein he mentioned Pakistan averted Sri Lanka like situation, have also helped to improve market sentiments.
In addition to it, News flows pertaining to foreign exchange inflows from Saudi Arabia had strengthened the PKR rally in the interbank market. According to the Bloomberg report, the Saudi Finance Ministry is planning to renew its $3bn deposit with the State Bank of Pakistan (SBP).
However, later this month, PKR joined back its traditional course of depreciation on the government’s decision to remove the ban on imported items that had increased the demand for dollars in the interbank market. The political noise had also added fuel to the fire.
Not to forget, the newly enforced law by UAE for Pakistani travelers to have 5,000 dirhams along with a valid work visa and a return ticket had also played a due role in PKR’s depreciation.
This development came after when UAE authorities deported 80 Pakistanis for having fake return tickets.
Though, after the IMF Executive Board’s approval of the seventh and eighth tranche of its stalled Extended Fund Facility (EFF), PKR made a comeback on Tuesday.
The board’s decision allows for an immediate disbursement of the $1.17bn, bringing total purchases for budget support under the arrangement to about $3.9bn.
Speaking to Mettis Global, Malik Bostan President of the Forex Association of Pakistan said that all the credit goes to the effective measures taken by the Ministry of Finance and the role being played by the Army Chief in taking the country out of the default-like situation.
The successful deal with IMF affirms the government’s objective to bring prosperity to the region, he added.
Since IMF has approved the $1.17bn and hopefully friendly countries will also come forward with notable investment plans, the local unit will likely be strengthening to PKR 210 per USD within six months.
With regard to the economic damages caused by monsoon floods and addressing the issue of food shortage, he appreciated the government’s idea to import food items from India.
In FYTD, PKR lost 13.9 rupees or 6.36%, while it plummeted by 42.23 rupees or 19.31% against the USD in CYTD, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 23.72% against the greenback while reaching its lowest at 239.94 on July 28, 2022, and the highest at 166.87 on September 01, 2021.
Furthermore, the local unit has weakened by 11.39% against EUR when it was highest on March 07, 22, while the rupee fell by 9.97% against GBP since its high on September 30, 2021.
PKR has strengthened by 14.72%, 14.29%,12.25%, 12.15%, 11.96%, 9.45% and 9.43%, against GBP, JPY, CHF, CNY, EUR, SAR, and AED, respectively in August.
Along with the US dollar, the currency gained 3.7 rupees against the Pound Sterling as the day's closing quote stood at PKR 254.79 per GBP, while the previous session closed at PKR 258.51 per GBP.
Similarly, PKR's value strengthened by 2.1 rupees against EUR which closed at PKR 218.66 at the interbank today.
On another note, within the money market, the overnight repo rate towards close of the session was 15.30/15.70%, whereas the 1-week rate was 15.05/15.15%.
Copyright Mettis Link News
Posted on:2022-08-31T17:30:29+05:00
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