Rupee Continues to Struggle Against the US Dollar Despite Big News from the ADB

The Pakistani Rupee (PKR) failed to post gains against the US Dollar (USD) and depreciated by one-third of a paisa against the greenback in the interbank market today. It hit an intra-day low of Rs. 178.15 against the USD during today’s open market session.

The PKR depreciated by 0.01 percent against the USD and closed at Rs. 178.15 today after it posted gains of three paisas and closed at 178.15 in the interbank market on Thursday, 23 December.

So far, the local currency has lost 13.08 percent on a fiscal-year-to-date basis besides depreciating by 11.46 percent on a calendar-year-to-date basis during the period in review.

Despite the fact that the rupee was barely able to pause the exchange spillover, the lack of fluctuation in commodity prices and incoming loan receipts through numerous overseas lending facilities are putting substantial pressure on the local unit. Experts and analysts across the board were astonished by the local currency’s highlight in today’s intra-day movements as everyone had expected the market to end the week in green subsequent to the receipt of the Asian Development Bank’s $300 million for the Energy Sector Reforms.

Moreover, the rupee failed to report gains on the back of news that the foreign reserves held by the State Bank of Pakistan (SBP) fell week-over-week by $415 million (2.2 percent) to $18.15 billion, mainly due to external debt repayments.

The market is refusing to acknowledge the significance of the upcoming sixth review meeting with the International Monetary Fund (IMF) which is only a few weeks away.

Highlighting a similar standpoint during the trading hours earlier today, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, stated, “Net Fx RES with SBP fell for 2nd time in DEC by $0.5bn to $18.15bn due2 increased outflow. In [the] past, SBP/Policymakers managed excessive PKR vs $ fall through foreign borrowing & sterilization, [but] now, [they’re] staying on [the] sidelines. [The] Market paid no heed 2the news of IMF board meeting”.

The PKR resumed its declining trend against most of the other major currencies as well. It posted losses of 63 paisas against the Pound Sterling (GBP), 20 paisas against the Australian Dollar (AUD), and nine paisas against the Euro (EUR).

Conversely, the rupee held out against both the UAE Dirham (AED) and the Saudi Riyal (SAR) despite the intraday threat of value shredding. It also held out the Canadian Dollar (CAD) in today’s interbank currency market.