PKR slides by 10 paisa in interbank

December 22, 2021 (MLN): After witnessing stable ground against the US dollar in the preceding two sessions, the Pakistani rupee (PKR) fell by 10 paisa in today's interbank session as the currency closed the day's trade at 178.15 per USD.

On Tuesday, the domestic unit had settled the trade at PKR 178.05 per USD.

The rupee traded in a range of 25 paisa showing an intraday high bid of 178.25 and an intraday low offer of 178.

The widening current account deficit and persisting demand for dollars have made it difficult for the local currency to gain any value.

In order to curb the dollarization, and improve transparency, the State Bank of Pakistan (SBP) has been taking numerous effective measures but eventually, the transactions through gray market/Hawala Hundi increase, Khurram Shahzad, Financial expert told Mettis Global.

It has been observed that before SBP’s restriction of biometric verification, the $7-8million dollars on daily basis were transacted through the open market, but the implementation of biometric verification has narrowed down the transaction to $2-3mn. The difference of amount has moved to the gray market, he explained.

Adding to it, he said whenever the government imposes any restriction, the secondary/undocumented market becomes active which needs to be controlled at utmost priority, he added.

From July’21 to date, the local unit has lost Rs20.60 against the USD. Similarly, the rupee fell by PKR18.31 in CY21, with the month-to-date (MTD) position showing a decline of 1.36%, as per data compiled by Mettis Global.

Within the open market, PKR was traded at 178.20/178.25 per USD

Meanwhile, the currency lost 55 paisa to the Pound Sterling as the day's closing quote stood at PKR 236.29 per GBP, while the previous session closed at PKR 235.74 per GBP.

On the other hand, PKR's value strengthened by 49 paisa against EUR which closed at PKR 200.75 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 8.85/9.00 percent, whereas the 1-week rate was 9.75/9.85 percent.

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