Thursday, September 29, 2022
HomeForexPKR weakens by 2.8 rupees in a week

PKR weakens by 2.8 rupees in a week

September 23, 2022 (MLN): In the backdrop of dismal macros, political uncertainty, and fears regarding higher imports on the back of flash floods across major agricultural hubs, the Pakistani rupee (PKR) has lost 2.8 rupees against the greenback this week, as the previous week was concluded at PKR 236.84 per USD.

“It seems that the initiative of the government and finance ministry towards the investment of dollars from friendly countries has not been productive and effective, the IMF deal had given us hope of recovering from the depreciation of rupees but it turned out to be the opposite”, Wajid Rizvi Head of Research at Intermarket Securities said.

In addition, while the country’s borrowing needs for the year are fully met, the outlook beyond FY23 remains uncertain.

As per the latest IMF document, the country’s gross borrowing needs over the next 5-yr are expected to top $180bn, meeting them or even rolling them over will be an uphill task.

Given the size of borrowing needs, the speculators continue to hoard the USD, effectively evaporating the liquidity from the market, Jehanzaib Zafar at AKD securities noted.

In the short term, the country’s borrowing needs may increase further as floods devastate standing crops in Sindh and lower Punjab. Resultantly, the country will need to import various food items to fulfill local demand and therefore the import bill driven by food imports, will bloat further, he added.

He further said that the spread between the interbank market and open markets (both formal and grey) has continued to grow owing to the lack of liquidity. Many small companies are unable to open LCs for imports and are forced to import on the bill of lading, and the payments for those imports are being made through the black market which is mopping up the liquidity in the market even further.

On the volatility front, the rupee-dollar parity recorded a massive 15.78% volatility in 60 days and 7.85% during last 30 days.

Within today’s session, the local unit appreciated by 6 paisa against US Dollar (USD) in today's interbank session as the currency closed the day's trade at PKR 239.65 per USD, against yesterday's closing of PKR 239.71 per USD.

During the session, the rupee traded in a range of 0.75 paisa per USD, showing an intraday high bid of 239.75 and an intraday Low offer of 239.5.

Within the Open Market, PKR was traded at 243/245.4 per USD.

Meanwhile, the currency gained 3.7 rupees against the Pound Sterling as the day's closing quote stood at PKR 267.97 per GBP, while the previous session closed at PKR 271.66 per GBP.

Similarly, PKR's value strengthened by 2.6 rupees against EUR which closed at PKR 234.31 at the interbank today.

On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation in which it injected Rs213.2 billion for 70 days.

The overnight repo rate towards close of the session was 14.00/14.10 percent, whereas the 1-week rate was 14.85/14.95 percent.

In FYTD, PKR lost 34.8 rupees or 14.52%, while it plummeted by 63.14 rupees or 26.35% against the USD in CYTD, as per data compiled by Mettis Global.

During the last 52 weeks, PKR lost 29.45% against the greenback while reaching its lowest at 239.94 on July 28, 2022, and the highest at 169.08 on September 24, 2021.

Furthermore, the local unit has weakened by 17.31% against EUR when it was highest at 193.75 on March 07, 2022, and lowest at 244.94 on August 01, 2022. While the rupee fell by 14.39% against GBP since its high of 229.398 on September 30, 2021 and low of 292.4 on July 28, 2022.

Copyright Mettis Link News

Posted on:2022-09-23T18:06:58+05:00

35218

RELATED ARTICLES
- Advertisment -

Most Popular