August 02, 2021 (MLN): Pakistani rupee (PKR) continued to lose its ground against US Dollar on the second consecutive session in today's interbank market and depreciated by 1.2 rupees, closed the day's trade at PKR 163.67 per USD.
In the previous session, the home unit had closed at PKR 162.43 per USD.
After 11 months of surplus, the reported deficit of current account and surging oil prices are bearing down on the rupee, reinforced a recent decline. Further, the market forces i.e., demand and supply also play their role in determining the exchange rate.
The demand for dollars continues to be strong due to pressure from importers on the back of strong economic recovery, pushing the domestic currency lower.
However, a few offsetting factors provide some cushion such as Pakistan’s foreign exchange reserves are still at a fairly robust level, amounting to a total of almost $25 billion on July 23, Asad Rizvi, the former Country Treasurer of Chase Manhattan Bank said.
Anticipating the PKR outlook, he stated that volume of remittances will likely to surge in months to come amid fourth wave of Covid-19 and the compliance of FATF conditions regarding anti-money laundering would also play its due role in rupee stability.
Moreover, the oil prices in international prices to ease off in the international market in the coming weeks which will also support home currency to release some pressure, he added.
The Rupee saw moderate volatility in today’s session and traded in a range of 1.60 rupees per USD showing an intraday high bid of 163.90 and an intraday Low offer of 162.45.
Within the Open Market, PKR was traded at 163.20/164.20 per USD.
According to data compiled by Mettis Global, the local unit has depreciated by 3.74% or PKR 6.12 in the fiscal year-to-date against USD. Similarly, the rupee has weakened by 2.34% or PKR 3.83 in CY21 with the month-to-date (MTD) position showing a decline of 1.43%.
Meanwhile, the currency lost 88 paisa to the Pound Sterling as the day's closing quote stood at PKR 227.89 per GBP, while the previous session closed at PKR 227.01 per GBP.
Similarly, PKR's value weakened by 1.3 rupees against EUR which closed at PKR 194.57 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 7.10/7.15 percent.
Copyright Mettis Link News