March 01, 2023 (MLN): The prolonged delay in the negotiations with the International Monetary Fund (IMF) has led to the dissipation of the positive sentiment, resulting in the devaluation of the Pakistani rupee (PKR) against the US dollar. The PKR lost 4.6 rupees in the interbank market on Wednesday, settling at PKR 266.11 per USD at the end of the trading day, as compared to the previous day's closing of PKR 261.5 per USD.
Throughout today’s session, the local unit traded in a band of 4.8 rupees, showing an intraday high bid of 266 and low offer of 261.40 while in the open market, PKR was traded at 267/270 per USD.
The IMF's delay in reaching a staff-level agreement has put the Pakistani rupee in a tight spot, forcing it to loosen its grip against the US dollar. In today's interbank session, the currency depreciated by a whopping 4.6 rupees, closing at PKR 266.11 per USD. This is a stark contrast to yesterday's closing of PKR 261.5 per USD, leaving investors on the edge of their seats.
Adding fuel to the fire, Moody's recent report has downgraded the country's local and foreign currency issuer and senior unsecured debt rating from Caa1 to Caa3. This has only added to the pressure on the PKR in the interbank market.
According to news reports, the IMF has set forth four prior actions that need to be taken before reaching a staff-level agreement. This has further heightened concerns among investors, leaving them with a sinking feeling in their stomachs.
In light of these recent developments, the State Bank of Pakistan (SBP) has called for a monetary policy committee meeting tomorrow. Experts predict that an increase in interest rates could be on the cards to address the economic challenges faced by the country.
In FYTD, PKR lost 61.26 rupees or 23.02%, while it plummeted by 39.68 rupees or 14.91% against the USD in CYTD. On the other hand, within the last seven sessions, the local unit moved down by 1.73%, as per data compiled by Mettis Global.
Meanwhile, the currency lost 6.7 rupees to the Pound Sterling as the day's closing quote stood at PKR 321.53 per GBP, while the previous session closed at PKR 314.84 per GBP.
Similarly, PKR's value weakened by 5.9 rupees against EUR which closed at PKR 283.09 at the interbank today.
On another note, within the money market, the overnight repo rate towards the close of the session was 17%/17.5%, whereas the 1-week rate was 17.35%/17.45%.
Copyright Mettis Link News
Posted on: 2023-03-01T17:23:49+05:00
