PKR sheds by 94 paisa in a week

MG News | December 10, 2021 at 05:12 PM GMT+05:00
December 10, 2021 (MLN): While maintaining its long losing streak, the Pakistani rupee (PKR) shed 10 more paisa during today’s interbank session against the US dollar as the currency closed the week at PKR 177.71.
On Thursday, the local unit had settled the trade at PKR 177.61 per USD after losing 18 paisa.
Throughout the session, the trading quotes being recorded in a range of 52 paisa per USD, observing an intraday high bid of 178.05 and an intraday low offer of 177.50.
During the week, the currency has lost 94 paisa against the greenback whereas the previous week witnessed a fall of 1.3 rupees to close at PKR 176.77 per USD.
It is pertinent to mention that PKR kicked off the week on a positive note, witnessing the tiny gain of 29 paisa on Monday mainly due to the receipt of a $3 billion deposit from Saudi Arabia under Saudi Fund for Development (SFD).
However, the impact quickly fizzled out as PKR remained under the bleak phase of depreciation for the rest of the week as it continued to take a beating of widening trade deficit and depleting foreign reserves which have amplified the demand for the dollar.
Apart from gloomy macros, the currency experts also attributed this inexorable slide to the presence of speculative elements in the market which are actively obtaining the undue advantage of prevailing uncertainties at the policy level.
Talking about the rupee outlook, Zafar Paracha, President Exchange Association of Pakistan told Mettis, “if the persisting uncertainties take too long, PKR will continue to lose its ground in the international market.”
He added that the sharp depreciation of almost 20 rupees from the fiscal year to date reflects the presence of IMF element/conditionalities. He also indicated the involvement of commercial banks in dollar hoarding which has disrupted the market equilibrium.
The continuous slide of PKR has also caught the attention of analysts, researchers, and policymakers and they are actively looking for loopholes to fix.
As per the survey conducted by different brokerage houses, the majority of the experts are expecting that the home unit will remain between PKR180-185 by the end of FY22.
As per the Exchange Companies Association of Pakistan (ECAP), PKR gained 10 paisa for buying and 40 paisa for selling over the day closed at 178.90 and 179.90 respectively in the open market.
The local unit has depreciated by 11.35% or PKR 20.16 in the fiscal year-to-date against the USD. Similarly, the rupee has weakened by 10.06% or PKR 17.87 in CY21, with the month-to-date (MTD) position showing a decline of 1.12%, as per data compiled by Mettis Global.
Meanwhile, the currency lost 3 paisa to the Pound Sterling as the day's closing quote stood at PKR 234.55 per GBP, while the previous session closed at PKR 234.53 per GBP.
On the other hand, PKR's value strengthened by 53 paisa against EUR which closed at PKR 200.55 at the interbank today.
On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation (OMO) in which it injected Rs1.71 trillion for 7 days at 9.02 percent.
The market is currently going through a liquidity problem and to address it, SBP has been injected around Rs2 trillion liquidity since May 21 on a seven-day rolling basis through reverse OMOs, as reported by Business Recorder.
The overnight repo rate towards the close of the session was 9.00/9.20 percent, whereas the 1-week rate was 9.05/9.15 percent.
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