July 19, 2021 (MLN): Amid strengthening demand for USD in the interbank session today, Pakistani rupee (PKR) continued to lose its ground by 1.5 rupee as the currency closed the day's trade at PKR 161.48 per USD, its lowest close since October 22, 2020.
In the previous session, the home unit had closed at PKR 159.94 per USD.
This time depreciation in PKR is mainly attributable to the market forces i.e, demand and supply that have played their due role. However, the recent round of improved Real Effective Exchange Rate (REER) would encourage more remittances and discourage imports, Muzammil Aslam, Senior Economist said.
Expressing his views over Rupee depreciation, Mattias Martinsson, Chief Investment Officer at Tundra Fonder tweeted, “It shows market forces are in play as the Current Account Deficit (CAD) is increasing while, the SBP is making good of its promise of a market-based exchange rate. The alternative has been tried (and failed) too many times before.”
The rupee saw an intraday high bid of 161.50 and an intraday low offer of 160.00 as market witnessed relatively an aggressive USD bidding on the back of upcoming Eid Holidays and the recently experienced extreme volatility, Asad Rizvi, the former Country Treasurer of Chase Manhattan Bank said.
Within the Open Market, PKR was traded at 160.50/161.50 per USD.
According to the data gathered by Mettis Global, the rupee has depreciated by 2.44% or PKR 3.94 in the fiscal year-to-date against USD. Likewise, the local unit has weakened by 1.02% or PKR 1.64 in CY21 with the month-to-date (MTD) position showing a decline of 2.44%.
Meanwhile, the currency lost 10 paisa to the Pound Sterling as the day's closing quote stood at PKR 221.6 per GBP, while the previous session closed at PKR 221.51 per GBP.
Similarly, PKR's value weakened by 1.5 rupees against EUR which closed at PKR 190.28 at the interbank today.
On another note, within the money market, the overnight repo rate towards close of the session was 7.15/7.30 percent, whereas the 1 week rate was 7.10/7.20 percent.
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