January 31, 2023 (MLN): After a prolonged losing streak, the Pakistani rupee (PKR) recovered by 4.63 rupees during early trade compared to the previous closing of PKR 269.63 per USD.
The dollar was being quoted at 265.24/269.24 (10:31 PST) with the trades being reported at 265 while in the open market, the dollar is being traded at 272/274.5 per USD.
The recent talks with the International Monetary Fund (IMF) have brought a sense of stability to the forex market, leading to a correction in exchange rate parity. This is a welcome change after the sharp decline in PKR value against the US dollar in previous sessions.
Since the removal of the dollar cap in the open market, the local unit slashed its value against the US dollar by 35 rupees as a result of the decision pertaining to the removal of the dollar cap in the open market.
The recent parity movement was expected given Pakistan needs to resume the IMF program as soon as possible. And one of the conditions of the IMF is a free float regime. Hence, in order to get IMF through, authorities had to take some unpopulous measures, currency adjustment being one of them, Sana Tawfik, Analyst at Arif Habib Limited told MG News.
Going forward, inflows from IMF followed by other international creditors are likely to bring some breather to this free fall, she added.
