PKR tumbles to 229.88 per USD, down by 1.5 rupees

July 25, 2022 (MLN): Enduring a freefall, the Pakistani rupee (PKR) has depreciated by 1.5 rupees against the US dollar in the interbank session on Monday as the currency settled the trade at PKR 229.88 per USD compared to the previous close of PKR 228.37 per USD.

The rupee observed a volatile trading session with quotes being recorded in a range of four rupees per USD showing an intraday high bid of 232 and an intraday low offer of 229.75 while in the open market, PKR was traded at 229/231 per USD.

Speaking to Mettis Global, Zafar Paracha, President of Exchange Companies Association of Pakistan (ECAP) said, the absence of government will to address this freefall of PKR will make the situation worst. 

“The financial credentials of the country are not that worst to make PKR fall to 232 per US dollar. It seems that the government is intentionally keeping the bullish momentum of the dollar in the interbank market intact,” he added.

The news item wherein it said that SBP asked commercial lenders to manage import-payment requests from their own inflows, has also created havoc in today’s session, he noted.

“Given the macroeconomic situation, PKR should not be above 190 per USD in the short-term while in the long-term I foresee PKR at 160 per USD. However, lack of government will to resolve such a serious issue has barred PKR to gain its value back,” he said.  

While commenting about the ongoing political mayhem, he stated that the impact of political noise on the freefall of PKR is quite meager. The major flaw is the absence of effective policies to arrest this freefall. He suggested the government fix the dollar PKR parity to prevent the currency from further damage.

He also pointed out that the whole scenario is only favorable to the speculative elements and those commercial banks who are making their fortunes.

In CYTD, the local unit plummeted by Rs53.36 or 23.21% against the USD while it registered a decline of 10.89% against the greenback in MTD, as per data compiled by Mettis Global.

During the last 52 weeks, PKR lost 29.86% against the greenback while reaching its lowest at 229.87 on July 25, 2022, and the highest of 161.22 on July 26, 2021.

Furthermore, the local unit has weakened by 19.15% and 19.67% against EUR and GBP, respectively since its high on July 26, 2021.

The performance of the local unit remained bleak against other major currencies in MTD as the currency lost its value by 10.89%, 10.76%, 10.75%, 10.15%, 10.11%, 10.06%, and 8.96% against AED, JPY, SAR, CHF, CNY, GBP, and EUR, respectively. 

Meanwhile, the currency lost 3 rupees to the Pound Sterling as the day's closing quote stood at PKR 276.29 per GBP, while the previous session closed at PKR 273.28 per GBP.

Similarly, PKR's value weakened by 2.9 rupees against EUR which closed at PKR 234.84 at the interbank today.

On another note, within the money market, the overnight repo rate towards the close of the session was 15.25/15.50%, whereas the 1-week rate was 14.25/14.35%.

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