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PKR: Spin out of control

PKR: Spin out of control
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March 14, 2023 (MLN): Sliding further, the Pakistani rupee (PKR) depreciated by 68 paisa against the US dollar in today's interbank session as the currency settled the trade at PKR 282.29 per USD compared to the previous closing of PKR 281.61 per USD.

Throughout today’s session, the local unit traded in a band of 2.25 rupees, showing an intraday high bid of 282.25 and low offer of 280.75 while in the open market, PKR was traded at 281.5/284 per USD.

The drop in the local unit's value is primarily attributed to the delay in the much-needed tranche from IMF. 

Given the worst economic phase, the country needs to unlock the IMF deal otherwise, it will likely be forced to pause its debt repayments, according to a recent report issued by Bank of America. 

Pakistan needs to repay about $3 billion of debt by June, and while $4 billion is expected to be rolled over, the country's current economic situation is precarious.

The report stated that default is a real possibility for Pakistan, which has been indicated by its current rating assigned by Fitch Ratings.

There is growing hope that China will come on board to provide a backstop to its long-time ally, which would be a significant development in the region's economic landscape.

Meanwhile, the currency lost 3 rupees to the Pound Sterling as the day's closing quote stood at PKR 343 per GBP, while the previous session closed at PKR 340.02 per GBP.

Similarly, PKR's value weakened by 1.4 rupees against EUR which closed at PKR 301.82 at the interbank today.

In FYTD, PKR lost 77.44 rupees or 27.43%, while it plummeted by 55.85 rupees or 19.79% against the USD in CYTD. On the other hand, within the last seven sessions, the local unit moved down by 1.57%, as per data compiled by Mettis Global.

On another note, within the money market, the overnight repo rate towards the close of the session was 19.50/19.75 percent, whereas the 1-week rate was 19.55/19.65 percent.

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Posted on: 2023-03-14T17:05:31+05:00