PKR sheds 3.74 rupees against USD in a week

November 03, 2023 (MLN): The Pakistani rupee (PKR) maintained its downward trend throughout the week, depreciating by 3.74 rupees against the U.S. Dollar to settle the week at PKR 284.31, as compared to the previous week's closing of PKR 280.57 per USD.

During today's session, the domestic currency saw an intraday high (bid) of 284.5 and a low (ask) of 283.6 and closed with a loss of 88.74 paisa.

In the open market, the local unit lost 50 paisa as the exchange companies quoted the dollar at 282 for buying and 285 for selling compared to the previous closing of 281.5 for buying and 284.5 for selling.

To note, this marks the tenth consecutive session in which the local currency has lost its value against the U.S. Dollar.

"The recent appreciation of the Pakistani rupee will likely be short-lived, given soaring interest costs and only short-term arrangements with the IMF and bilateral financing to support the external balance," analysts led by Kamakshya Trivedi wrote in a Wednesday report. 

"The market will continue to require a premium for Pakistan's rupee ahead of elections," he added.

It is important to mention that the State Bank of Pakistan (SBP) in its Monetary Policy Committee (MPC) meeting held on Monday decided to keep interest rates unchanged at 22%, foreseeing the downward trend in inflation.

This decision came in line with the market expectations.

The financial markets are reacting positively to the country's compliance with all the conditions outlined by the International Monetary Fund (IMF) for the nine-month Stand-by Arrangement (SBA).

Moreover, the IMF review mission on Thursday appreciated the government's effort to meet the targets set by the fund for the first quarter of the fiscal year 2023-24. 

The satisfactory completion of the first review, which commenced yesterday, will pave the way for the release of the second installment worth $700 million on December 1, 2023.

In comparison to major currencies, PKR lost 1.65 rupees against the Euro, closing at 302.08 compared to the previous value of 300.43.

The British Pound became expensive by 1.89 rupees, closing at 346.63 compared to 344.74 from a day ago.

Swiss franc saw gains of 23.6 paisa, closing at 313.36 compared to 313.13 from the previous session.

Against the Japanese Yen, PKR lost 0.64 paisa, closing at 1.891 versus 1.884 a day ago.

The Chinese Yuan gained 13.72 paisa, closing at 38.8623 against 38.7251 from the previous session.

The Saudi Riyal closed at 75.78 with a gain of 22.95 paisa from its value of 75.55 a day ago.

The U.A.E Dirham increased in value by 24.16 paisa from 77.166 a day ago to 77.407.

During the current financial year, PKR has appreciated against the Dollar by 1.68 rupees or 0.59%. While the current calendar year has seen PKR depreciate by 57.88 rupees or 20.36%.

In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched down by 6 bps to 21.44% and 21.69%.

The State Bank of Pakistan (SBP) conducted a reverse repo and Shariah-compliant Modarabah-based Open Market Operation (OMO) today, in which it cumulatively injected a total of Rs2.92 trillion into the market.

Of which Rs2.87tr were injected through reverse repo OMO. 

Meanwhile, the remaining Rs51bn was injected through Shariah-compliant Modarabah-based OMO. 

To recall, the SBP conducted an auction on Monday, the results of which affirmed the market's expectations of an interest rate peak. This auction, once again, saw record-high participation in 12-month MTBs.

Performance Summary

52 Week Performance

Copyright Mettis Link News