PKR slumps to record low of 186.13/USD

April 06, 2022 (MLN): Along with political turmoil, the rising economic challenges including a decline in foreign exchange reserves and delay in the IMF program have created a strong spell of depreciation around the Pakistani rupee (PKR) as the currency closed the day's trade at PKR 186.13 per USD, witnessing a slash of 90 paisa in the interbank market.

The rupee endured a volatile trading session with quotes being recorded in a range of 80 paisa per USD showing an intraday high bid of 186.25 and an intraday low offer of 185.45.

Economic experts and analysts believe that early resolution of the crisis and the Supreme Court ruling on the matter can bring some clarity and stability otherwise, the currency will have to endure a sharp decline in days to come, threatening to add inflationary pressure with a possible hike in interest rate.

However, Mattias Martinsson Founder and Chief Investment Officer at Tundra Fonder is of the view that regardless of the SC's decision today it is hard not to see new elections in Pakistan in 2022.

“Can't see how the opposition will be able to sit until 2023. Them trying would be a worst-case outcome. The earlier elections, the better,” he added.

From July’21 to date, the local unit has lost Rs28.58 against the USD. Similarly, the rupee fell by Rs9.61 in CYTD, with the month-to-date (MTD) position showing a decline of 1.42%, as per data compiled by Mettis Global.

During the last 52 weeks, PKR lost 18.19% against the greenback, reached its lowest at 186.13 today and touched its high of 152.27 on May 7, 2021.

Furthermore, the local unit has weakened by 10.47% since its high on April 08, 2021, against EUR.  While, it has dropped by 13.81% against GBP since its high on April 09, 2021.

In addition, the performance of PKR remained bleak against major currencies during the current year to date as it depreciated by 5.29%, 5.24%, 5.17%, 3.13%, 2.04%, 2%, and 1.55% against CNY, SAR, AED, CHF, GBP, JPY, and EUR, respectively.

Within the open market, PKR was traded at 186/187.20 per USD.

Meanwhile, the currency lost 10 paisa to the Pound Sterling as the day's closing quote stood at PKR 243.23 per GBP, while the previous session closed at PKR 243.14 per GBP.

On the other hand, PKR's value strengthened by 63 paisa against EUR which closed at PKR 202.77 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 10.25/10.50 percent, whereas the 1-week rate was 9.95/10.05 percent.

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