July 13, 2022 (MLN): While sinking to the bottomless pit, the Pakistani rupee (PKR) witnessed a massive fall of 2.2 rupees against the US dollar in a single session in the interbank market on Wednesday as the currency settled the trade at PKR 210.10, compared to the previous session's closing of 207.91 per USD.
The rupee endured a volatile trading session with quotes being recorded in a range of 3.4 rupees per USD showing an intraday high bid of 210.90 and an intraday low offer of 208 while in the open market, PKR was traded at 208.50/210.50 per USD.
Since the market opened after a 5-day long Eid holiday, the demand for dollars remained elevated throughout the session today due to payment of import bills, Arsalan Siddiqui, Research Head at Optimus Capital Management told Mettis Global.
He also added that risk of export decline amid global recession especially the economic condition of Europe as it is the major export market of Pakistan and economic uncertainty on the local front kept the PKR under pressure.
Drip by drip, the PKR is losing its all-previous marginal gains which have been secured in the name of Chinese $2.3bn due to continuous delay in IMF tranche, melting reserves that are currently standing at $15.7bn, and deteriorating current account balance due to higher import bill.
Furthermore, the dollar in the international market also remained firm ahead of U.S. inflation data. Analysts are of the view that the expectations of interest rate hikes would be reinforced if the U.S. CPI is stronger than expected which would keep the dollar elevated.
In CYTD, the local unit plummeted by Rs33.59or 15.99% against the USD while it registered a decline of 2.50% against the greenback in MTD, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 24.26% against the greenback while reaching its lowest at 211.93 on June 22, 2022, and the highest of 159.12 on July 14, 2021.
Furthermore, the local unit has weakened by 11.01% since its high on July 14, 2021, against EUR, while it has depreciated by 11.73% against GBP since its high on July 09, 2021.
The performance of the local unit remained bleak against other major currencies in MTD as the currency lost its value by 2.50%, 2.47%, 2.11%, 1.82%, 0.53%, and 0.10% against AED, SAR, CNY, GBP, and CHF, respectively. On the other hand, PKR appreciated by 1.39% against EUR in the same period.
Meanwhile, the currency lost 83 paisa to the Pound Sterling as the day's closing quote stood at PKR 249.8 per GBP, while the previous session closed at PKR 248.97 per GBP.
On the other hand, PKR's value strengthened by 49 paisa against EUR which closed at PKR 213.32 at the interbank today.
On another note, within the money market, the overnight repo rate towards the close of the session was 14.10/14.25 percent, whereas the 1-week rate was 12.80/12.90 percent.
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