The Pakistani Rupee (PKR) lost the upward momentum from Friday and yesterday and once again posted deterioration against the US Dollar (USD).
The final trading day of the past week had pulled PKR out of two weeks of deterioration. Monday saw nominal improvement in that, but Tuesday ended with a loss of 13 paisas for PKR against the greenback.
The PKR closed at Rs. 154.53 to the USD at the end of the trading day today (Tuesday, 1 June), as compared to Rs. 154.39 to the USD on Monday (31 May).
Regarding the PKR’s continued downfall, dealers believe that there has been a demand for the USD in the market that has dragged the former down. This is despite the fact that consistent dollar inflows from overseas Pakistanis are helping the Rupee remain steady.
Friday’s improvement could be attributed to the increase in the reserves held by the State Bank of Pakistan (SBP), as the latest data by the central bank showed.
Today’s downfall, however, may be explained by the rise in real effective exchange rate (REER). Former Treasury Head at Chase Manhattan Bank Asad Rizvi took to Twitter earlier in the day and said, “Initially, I am expecting strong Rupee opening, but I will wait to see if the tone is sustainable or not [because] Real Effective Exchange Rate (REER) has surpassed crucial benchmark base of 100 and new [REER] is 103.2982, which does not support PKR”.
Against other major currencies as well, the PKR posted blanket losses in the interbank currency market today.
PKR posted a loss of 62 paisas against the Euro, 34 paisas against the Pound Sterling (GBP), 12 paisas against the Australian Dollar (AUD), and 38 paisas against the Canadian Dollar (CAD).
The PKR also posted losses of 3.5 paisas against the UAE Dirham (AED) and the Saudi Riyal (SAR) each, in the international currency market today.