The Pakistani Rupee (PKR) dropped to a new all-time low against the US Dollar (USD) again and depreciated by five paisas against the greenback in the interbank market today. It hit an intra-day low of Rs. 178.65 against the USD during today’s open market session.
The PKR depreciated by 0.03 percent against the USD and closed at Rs. 178.24 today after taking minor hits and closing at 178.19 in the interbank market on Tuesday, 28 December.
The rupee spillover has continued to put more weight behind market predictions which suggest that it will stay under pressure for another few weeks into 2022. Moreover, headline inflation is expected to track the near-term economic outlook in double digits due to a multitude of factors.
According to the numbers released by the State Bank of Pakistan (SBP), the outflow of profits and dividends on foreign investments from the country increased by 3.72 percent to $776 million during the first five months of the current fiscal year as compared to $748 million in FY21.
Financial businesses had the biggest outflows with $148.2 million in repatriated earnings in July-November FY2022 as compared to $92.5 million during the same period last year. The profits and payouts of multinational corporations have also slowed down, and the exchange unit depreciation is partly to blame.
The federal Cabinet has approved the SBP Amendment Bill, 2021, which aims to reduce government borrowing for the central bank in accordance with the International Monetary Fund (IMF) and, to that effect, support the local unit.
Discussing the local currency’s near-term outlook earlier during the day, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, tweeted, “[The] Year-end demand for USD is keeping market on toes. The outlook for PKR remains weak, as trends suggest that there is limited room for Rupee 2 appreciate. While in today’s T-Bill Auction, Banks will not hesitate 2 demand higher return[s]. It’s tricky, MOF may not pick all”.
INTER BANK
Year end demand for USD is keeping market on toes. The outlook for #PKR remains weak,as trend suggest that there is limited room for RUPEE 2appreciate.
While, in today’s T/BILLS AUCTION BANKS will not hesitate 2 demand higher return. It’s tricky,MOF may not pick all— Asad Rizvi (@asadcmka) December 29, 2021
Conversely, the PKR reversed its losses against most of the other major currencies in the interbank market today. It posted gains of 74 paisas against the Euro (EUR), 23 paisas against the Pound Sterling (GBP), 10 paisas against the Australian Dollar (AUD), and 21 paisas against the Canadian Dollar (CAD).
Contrarily, it reported losses of one paisa against the UAE Dirham (AED) and two paisas the Saudi Riyal (SAR) in the interbank currency market.
