Rupee Crashes Against US Dollar After Eid Holidays

The Pakistani Rupee (PKR) continued its fall against the US Dollar (USD) as it breached the Rs. 186 mark following Eid holidays. The local currency lost 94 paisas against the greenback at the close of today’s session.

PKR depreciated by 0.50 percent against the USD and closed at Rs. 186.63 today. The rupee had registered a decline on Saturday (April 30), closing at 185.69 after a day-on-day decline of 6 paisas.

Usually, the flow of remittances registers an uptick leading up to the Holiday period (Eid), lending support to the rupee. As the uptick in foreign remittances settles down, the trends of the foreign exchange market would now become clear.

Discussing the local currency’s performance earlier during the day, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, tweeted that due to the Eid holidays in Pakistan and the Middle East, the market is yet to open and the rupee could come under pressure as NOSTROs accounts will need funding. He added that remittances would dry out for about a week, and managing cash flow will be ‘a challenging task’ due to the weekend.

Rizvi also questioned the decision to persist with the 6-day working week and said that current oil prices are hard to pay. He said that working on Saturdays will add further pressure on the balance of payments and foreign exchange reserves. He warned that if exports and productivity do not pick up, the government will be directly blamed.

The PKR also reported losses against most of the other major currencies in the interbank market today. It lost 91 paisas against the Australian Dollar (AUD), 27 paisas against the Euro (EUR), and 77 paisas against the Canadian Dollar (CAD).

However, it gained a massive Rs. 3.88 against the Pound Sterling (GBP).