The Pakistani Rupee (PKR) crashed below the 221 level against the US Dollar (USD) during intraday trade today.
By midday, the local unit had lost over Rs. 5.81 against the greenback and was trading at Rs. 222.11 in the open market. This is the highest intraday drop in over three years. Since 11 April, the greenback is up by Rs. 38.04 against the PKR.
The rupee is taking a beating during intra-day trading today as analysts suggest former Prime Minister Imran Khan’s victory in Sunday’s polls exacerbated the local unit’s downfall against the dollar.
CEO of Alpha Beta Core Securities, Khurram Schehzad, told ProPakistani,
On the dollar rate today, Heard two banks have some payments to make, so they are trying to get the US$ from the SBP while SBP is not releasing dollars, so these banks are accumulating it from the market. And heard these payments are not that big either. This means the dollar rate may not sustain at these high levels.
On Monday, PKR slid by 1.97 percent against the USD and closed at Rs. 215.20 after losing Rs. 4.24 in the interbank market, the highest single-day drop since 26 March 2020.
According to Fitch Ratings, renewed political volatility in Pakistan cannot be excluded and could undermine the authorities’ fiscal and external adjustment, as happened in early 2022 and 2018, particularly in the current environment of slowing growth and high inflation.
Fitch Ratings stated that limited external funding and large current account deficits (CADs) have drained foreign exchange (FX) reserves, as the State Bank of Pakistan (SBP) has used reserves to slow currency depreciation. Liquid net FX reserves at the SBP declined to about $10 billion or just over one month of current external payments by June 2022, down from about $16 billion a year earlier.
This is an intraday market update.