The Pakistani Rupee (PKR) finally made recovery after four sessions against the US Dollar (USD) and posted gains in the interbank market today.
It appreciated by 0.65 percent against the USD and closed at Rs. 201.52 after gaining Rs. 1.30 in the interbank market today. The local unit hit an intra-day low of Rs. 202.70 against the USD during today’s open market session.
The rupee reversed its four-day losing streak against the dollar today despite the mounting pressure of import payments and foreign debt repayments. It is trading close to yesterday’s all-time low of 202.83 against the dollar.
According to Bloomberg, Pakistan will most likely meet the conditions for the International Monetary Fund (IMF) to resume its bailout program, paving the way for a rebound in the rupee. The loan from the agency will enable the rollover of loans by bilateral creditors including China, and new lending from multilateral creditors along with a combination of bond issuances, FDI, and portfolio inflows.
Pakistan targets a staff-level agreement with IMF this month after raising fuel prices by 40 percent last week, a key condition for the lender’s loan deal.
On the flip side, inflation for the fiscal year 2023 is estimated to be as fast as 15.3 percent if the government charges taxes on fuel and raises gas prices.
The local unit’s recovery was fueled when late on Tuesday Finance Minister Miftah Ismail clarified the government’s stance on another possible hike in petroleum rates. “There will be no increase in prices today and there is no summary or plan to raise prices,” the minister said in his tweet.
Social media was rife throughout the day with rumors that the government is set to notify another major hike in prices of petroleum products before midnight. It is pertinent to mention here that the government had increased the prices of petroleum products by Rs. 30 per liter on Friday. The coalition government has jacked up the price of petroleum products by Rs. 60 per liter since May 27. Currently, petrol is priced at Rs. 209.86, diesel at Rs. 204.15, kerosene oil at Rs. 181.94 and light diesel at Rs. 178.31.
Globally, Brent crude again entered the $120 level after briefly peaking at $122 on Wednesday, while the US West Texas Intermediate (WTI) settled at $120.9. Oil prices soared today despite a rise in US oil stocks, the easing of Chinese COVID-19-related lockdowns, and a possible strike by Norwegian oil workers.
The PKR recovered against the other major currencies in the interbank market today. It gained 35 paisas against the Saudi Riyal (SAR), 35 paisas against the UAE Dirham (AED), 48 paisas against the Pound Sterling (GBP), and Rs. 1.30 against the Euro (EUR).
Moreover, it gained 33 paisas against the Canadian Dollar (CAD) and 85 paisas against the Australian Dollar (AUD) in today’s interbank currency market.