July 27, 2022 (MLN): The deepening economic crisis is badly hurting the Pakistani rupee (PKR) as the currency closed the day's trade at PKR 236.02 against the greenback in the interbank market, depreciating by 3.1 rupees compared to the previous close of PKR 232.93 per USD.
The rupee observed a volatile trading session with quotes being recorded in a range of 4.2 rupees per USD showing an intraday high bid of 233 and an intraday low offer of 235.86 while in the open market, PKR was traded at 239/241 per USD.
In the backdrop of melting foreign exchange reserves, the interbank market is suffering from chaos and uncertainty.
There is chaos amongst importers these days the SBP had also been reluctant to release reserves to contain the exchange rate volatility, people familiar with the matter told Mettis Global.
However, Federal Minister for Finance and Revenue Miftah Ismail is quite optimistic that PKR will soon recover its previous losses.
While addressing the seminar on improving the Corporate Governance and Performance of SOEs organized by the Finance Division on Wednesday, he said, “The import bill during the current month has reduced significantly and he is optimistic that the inflows of dollars will be more than the outflows from next month that would reduce the pressure on the local currency.”
With regards to the IMF program, he said Pakistan will likely receive $4 billion over the next year.
The friendly countries will also provide funds of the same amount in terms of investment in the stock market, purchase of two power plants, and deferred oil and gas payments.
In CYTD, the local unit plummeted by Rs59.5 or 25.21% against the USD while it registered a decline of 13.21% against the greenback in MTD, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 31.41% against the greenback while reaching its lowest at 236.01 on July 27, 2022, and the highest of 161.88 on July 29, 2021.
Furthermore, the local unit has weakened by 20.02% and 21.32% against EUR and GBP, respectively since its high on July 27, 2021.
In addition to it, the performance of the local unit remained bleak against other major currencies in the last seven sessions as the currency lost 5.51%, 5.31%, 5.08%, 4.71%, 4.60%, and 3.84%, against JPY, CHF, GBP, AED, SAR, CNY, and EUR, respectively.
Meanwhile, the currency lost 3.6 rupees to the Pound Sterling as the day's closing quote stood at PKR 284.19 per GBP, while the previous session closed at PKR 280.58 per GBP.
Similarly, PKR's value weakened by 1.2 rupees against EUR which closed at PKR 239.3 at the interbank today.
On another note, within the money market, the overnight repo rate towards the close of the session was 15.10/15.30%, whereas the 1-week rate was 14.85/14.95%.
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