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PKR witnesses steep decline, closes at 180.07/USD

March 17, 2022 (MLN): While hitting new lows during the past few sessions, the Pakistani rupee (PKR) finally crossed the physiological level of 180 against the greenback on Thursday in the interbank session, as the currency settled the trade at PKR 180.07 per USD, depreciating by 64 paisa.

On Wednesday, the rupee had closed the session at PKR 179.44 per USD.

Throughout the day, the domestic unit traded in a range of 70 paisa showing an intraday high bid of 180.15 and an intraday low offer of 179.65. During the intraday trade, the local currency hit the mark of 180.24 against the USD.

The steep decline in PKR valuation is based on a combination of domestic and international factors including Russia-Ukraine issue, increase in commodity prices, and soaring import bill which has deteriorated the current account deficit. In addition, political noise at the local front due to the non-confidence vote extended by the opposition against Prime Minister Imran Khan has also created panic in the market.

Speaking to Mettis Global, Zafar Paracha President Exchange Companies of Pakistan (ECAP) said, PKR will continue to bear downward pressure, going forward, if the ongoing crisis on the global front does not settle down.

The role of the State Bank of Pakistan (SBP) remained commendable as the currency is still performing better in the prevailing uncertainty, he added.

In order to prevent the currency from further depreciation, a substantial decline in imports while an increase in export volume is required, he suggested. 

From July’21 to date, the local unit has lost Rs22.52 against the USD. Similarly, the rupee fell by PKR3.56 in CY22, with the month-to-date (MTD) position showing a decline of 1.45%, as per data compiled by Mettis Global.

In addition, the performance of PKR remained bleak against major currencies during the fiscal year to date as it depreciated by 14.02%, 12.51%, 12.48%, 10.76%, 8.14%, 5.99% against CNY, AED, SAR, CHF, GBP and JPY, respectively.

During the last 52 weeks, PKR lost 15.44% against the greenback, reached its lowest at 180.07 today and touched its high of 152.27 on May 7, 2021.

Furthermore, the local unit has weakened by 9.84% since its high on March 31, 2021, against EUR.  While, it has dropped by 11.65% against GBP since its high on April 09, 2021.

Within the open market, PKR was traded at 179.80/181 per USD.

Meanwhile, the currency lost 3.3 rupees to the Pound Sterling as the day's closing quote stood at PKR 237.28 per GBP, while the previous session closed at PKR 233.99 per GBP.

Similarly, PKR's value weakened by 2.3 rupees against EUR which closed at PKR 198.98 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 Rs.1.78 trillion for 7 days at 8.91 percent.

The overnight repo rate towards the close of the session was 9.80/10.00 percent, whereas the 1-week rate was 10.06/10.16 percent.

Copyright Mettis Link News

Posted on: 2022-03-17T17:11:45+05:00

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