PKR trades 27 paisa lower against USD

November 27, 2023 (MLN): The Pakistani rupee (PKR) depreciated by over 27 against the US dollar in Monday's interbank session and settled at PKR 285.64 as opposed to the previous day's closing of PKR 285.37 per USD.

The local unit saw an intraday high (bid) of 285.82 and a low (ask) of 286.

In the open market, the local unit lost 50 paisa as exchange companies quoted the dollar at 284 for buying and 287 for selling, compared to the previous closing of 283.50 for buying and 286.50 for selling.

It is important to mention that the local unit marked its second consecutive weekly against the greenback by appreciating 1.13 rupees.

This upswing was attributed to the successful staff-level agreement (SLA) between the International Monetary Fund (IMF) and Pakistani authorities during the first review under the Stand-By Arrangement (SBA).

Pending approval by the IMF's Executive Board, the agreement will grant Pakistan access to SDR 528 million, around $700m.

In the statement issued by the IMF on the approval, the Fund said that strengthening macroeconomic sustainability and laying the conditions for balanced growth are key priorities under the SBA.

The authorities’ policy priorities include returning to a market-determined exchange rate and rebuilding FX reserves.

While inflows following increased regulatory and law enforcement helped normalize import and FX payments and rebuild reserves, the authorities recognize that the rupee must remain market-determined to alleviate external pressures and rebuild reserves sustainably.

To support this, they plan to strengthen the transparency and efficiency of the FX market and refrain from administrative actions to influence the rupee.

Moreover, in a recent development, Pakistan is likely to receive funds worth $1.5 billion from global lenders upon the IMF's approval of the loan tranche under the $3bn SBA, the caretaker finance minister, Dr Shamshad Akhtar stated during an interview with a local news channel.

Despite experiencing a weekly gain amid this positive trend, the PKR has depreciated for three consecutive days.

To recall, the pressure resulting from the gap between the demand and supply of dollars prevailed over the market for days and the PKR suffered losses for four consecutive weeks.

However, as per Bloomberg's latest report, the local unit's outlook will improve following the International Monetary Fund’s preliminary approval for the release of the next loan tranche under the current $3bn loan program.

In comparison to major currencies, PKR lost 1.41 rupees against the Euro, closing at 312.72 compared to the previous value of 311.31.

The British Pound became expensive by 2.06 rupees, closing at 360.25 compared to 358.2 from a day ago.

Swiss franc saw gains of 1.37 rupees, closing at 324.26 compared to 322.89 from the previous session.

Against the Japanese Yen, PKR lost 0.96 paisa, closing at 1.917 versus 1.908 a day ago.

The Chinese Yuan gained 3.79 paisa, closing at 39.9363 against 39.8984 from the previous session.

The Saudi Riyal closed at 76.16 with a gain of 7.48 paisa from its value of 76.09 a day ago.

The U.A.E Dirham increased in value by 7.54 paisa from 77.702 a day ago to 77.777.

During the current financial year, PKR has appreciated against the Dollar by 0.35 rupees or 0.12%. While the current calendar year has seen PKR depreciate by 59.21 rupees or 20.73%.

In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched up by 1 bps to 21.19% and 21.44%.

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