PKR plunges to historic low of 299 against USD

August 22, 2023 (MLN): The Pakistani rupee (PKR) continues to face immense pressure as the currency lost 1.87 rupees against the US dollar in Tuesday's interbank session and settled the trade at PKR 299.007 per USD, compared to the previous session's closing of PKR 297.134 per USD.

The currency saw an intraday high (bid) of 299.15 and a low (ask) of 298.9.

In the open market, Exchange Companies quoted the dollar at 305 for buying and 309 for selling.

The local unit continues to face immense pressure amid political uncertainty surrounding the general elections, which is causing turbulence in local markets.

Recalling the IMF staff report issued on July 18, 2023, a market-determined exchange rate was recommended to absorb external pressures. Consequently, the government's ability to control the rupee through trade restrictions has been limited.

The removal of restrictions on letters of credit (LCs) has led to an increased demand for dollars.

However, importers in Pakistan are finding it difficult to obtain import permits for their manufacturing needs due to dollar shortages, resulting in cargoes remaining stuck in ports.

It is worth mentioning that following four consecutive periods of current account surpluses, the country witnessed a significant shift and recorded a substantial current account deficit of $809 million in July 2023.

Pakistan, as an import-based nation, remains exposed to the constant rise of international oil prices in the past few weeks, which in turn increases the demand for dollars.

In comparison to major currencies, PKR lost 2.94 rupees against the Euro, closing at 326.40 compared to the previous value of 323.46.

The British Pound became more expensive by 4.18 rupees closing at 382.34 compared to 378.16 from a day ago.

The Swiss franc saw gains of 2.79 rupees, closing at 340.67 compared to 337.88 from the previous session.

Against the Japanese Yen, PKR lost 0.95 paisa, closing at 2.052 versus 2.043 a day ago.

The Chinese Yuan gained 34.24 paisa, closing at 40.99 against 40.66 from the previous session.

The Saudi Riyal increased in value by 50.66 paisa from 80.899 a day ago to 81.406.

The U.A.E Dirham closed at 79.72 with a gain of 49.2 paisa from its value of 79.22 a day ago.

During the current financial year, PKR has depreciated against the Dollar by 13.02 rupees or 4.35%. While the current calendar year has seen PKR depreciate by 72.58 rupees or 24.27%.

In the Money Market, the benchmark 6-Month Karachi Interbank Bid and Offer rates inched down by 2 bps to 22.91% and 23.16%.

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