The Pakistani Rupee (PKR) finally reversed its record-breaking fall against the US Dollar (USD) and reported gains in the interbank market today. The local currency gained Rs. 3.49 against the greenback at the close of the session today. This is the biggest single-day gain that the local currency has reported in over two years.
It appreciated by 1.86 percent against the USD and closed at Rs. 184.68 today after losing Rs. 2.09 and closing at Rs. 188.18 in the interbank market on Thursday, 7 April. The domestic currency hit an intra-day low of Rs. 188.50 against the USD during today’s open market session.
Economic Analyst, A. H. H. Soomro, told ProPakistani,
Rupee has strengthened after SBP’s timely emergency meeting with a strong 2.5% hike. It’s responding at a time when FX reserves are falling bottomlessly. This hike is going to ward speculators away and nudge exporters to convert US Dollars. Until clarity on new sources of funding emerge or hot money pours, PKR may head towards Rs. 180 barring no further deterioration in political climate.
The rupee closed in the green against the dollar today after the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) on Thursday raised the policy rate by 250 basis points to 12.25 percent from 9.75 percent, the highest one-shot increase since the 300 bps in October-1996.
Consequently, the central bank increased the mark-up financing rates under the Export Finance Scheme (EFS) by 2.5 percent, in accordance with the policy rate hike announced at the monetary policy meeting. As a result of this trend, the cost of input for exportable industries, notably textile and associated sectors, would rise. Banks’ spreads for corporate and SME borrowers would stay constant, at 1 percent and 2 percent, respectively.
In reference to factors that most likely helped support the exchange rate correction, the Supreme Court on Thursday overturned the ruling of National Assembly Deputy Speaker Qasim Suri, restoring the National Assembly to its position of April 3, and declaring Prime Minister Imran Khan’s advice to the president to dissolve the Assembly unconstitutional and without legal effect.
Discussing the local currency’s performance earlier during the day, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, commented that SBP’s rate hike of 250 basis points and imposition of cash margins on 177 goods is a sign that the economy is in a tailspin and that previous interventions were ineffective.
INTER BABK MARKET…
SBP hiking of rate by 250bp & imposition of cash margin on 177 products is hint that the economy is in dolls drum & measures taken earlier was not supportive.
Recent exaggerated #PKR & policy rate moves are beyond understanding. I am still baffled.— Asad Rizvi (@asadcmka) April 8, 2022
The PKR reversed losses against the other major currencies and reported gains in the interbank currency market today. It gained 93 paisas against the Saudi Riyal (SAR), 95 paisas against the UAE Dirham (AED), Rs. 3.41 against the Canadian Dollar (CAD), Rs. 4.65 against the Euro (EUR), and Rs. 5.89 against the Pound Sterling (GBP).
Moreover, it gained Rs. 3.17 against the Australian Dollar (AUD) in today’s interbank currency market.
So 1 USD being 185 PKR is something to be proud about?.. lol
So, the sins of Pakistan are being forgiven for ousting elected PM Imran Khan. It also proves that the letter that Imran Khan was showing was true.
America playing games with pakistan, this is a temporary stability of rupees against dollars and this is bcz the American just wants to make fool the Pakistanis to show like new selected government can control rupees against dollar. This is the great game of the busted America.
Hi, what about the gain against some other currencies, like dirham, riyal, Canadian, German, pound and euros, you mean they all are supporting new govt?