PKR recovers in intraday

November 15, 2021 (MLN): Snapping a 5-day losing streak, the Pakistani rupee (PKR) recovered in intraday trade by 1.1 rupees as the currency improved to PKR 174.63 against the US dollar (11:34 PST) mainly due to the positive statement by Advisor to the Prime Minister on Finance and Revenue wherein he hinted that the prevailing uncertainty pertaining to IMF loan facility is going to be over soon. 

Speaking to Mettis Global, Malik Bostan, President Forex Association of Pakistan termed Shaukat Tarin's latest statement as "a breath of fresh air" in a wake of  PKR's depreciating spell.

Given the statement, the speculators will soon bear a huge loss as PKR would gain its lost momentum, he added. 

In addition, the decent growth in workers' remittances also has an impact on the PKR's value. To note, inward workers’ remittances continued their strong streak during October as inflows jumped by 10% year-on-year to $2.5 billion.

“At $2.5bn in October 2021, remittances continue their strong streak, rising by 10% from October 2020 and only moderating marginally compared to September 21. Cumulatively, they have risen to $10.6bn so far in FY22, up 12% over the same period last year,” the central bank said in a tweet.

Meanwhile, the State bank of Pakistan (SBP) has increased the average Cash Reserve Requirement (CRR) increased from 5% to 6% and the minimum CRR to be maintained each day has been increased to 4% from 3%.

With regards to the said move of the State Bank of Pakistan, the former Treasury Head at Chase Manhattan, in his early morning Tweet said, "The focus of Interbank Market will be on Hike of CRR to 6%."

"Roughly Rs 175 billion is expected to be drained out of the system," he added. 

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