The Pakistani Rupee (PKR) opened 2023 all red against the US Dollar (USD) and posted losses during intraday trade today.
It depreciated by 0.22 percent and closed at Rs. 226.94 after losing 50 paisas. It quoted an intraday low of 227.425 against the greenback before close.
The local unit was all red against the greenback 10th day in a row and opened trade at 227 in the open market. By midday, the greenback moved lower against the rupee. After 1 PM, the local unit dropped and stayed on the 226 level against the top foreign currency before the interbank close.
The rupee reported losses against the US Dollar today as money changers predicted markets to remain bearish on the opening interbank session of the calendar year 2023.
Given Pakistan’s huge external debt issues and worsening domestic economic clout, another International Monetary Fund (IMF) program remains the only option to save the economy.
According to a report by Arif Habib Limited (AHL), the PKR/USD has stabilized over the past few months following administrative measures undertaken by the SBP including limits on LC opening, bans on certain imports, and curbs on dollar repatriation to keep dollar outflows in check. This has, however, created a vibrant grey market with a 10-12 percent gap between official and unofficial rates hurting official remittances in the process (10 percent decline in 5MFY23).
The report does not see these measures as sustainable and expects the SBP to gradually loosen administrative measures as the IMF’s 9th review concludes and other flows materialize. Against this backdrop, the data forecasts the PKR/USD to depreciate to 250/263 between June-December 2023.
Globally, oil prices fell in volatile trade on Tuesday, weighed down by weak Chinese demand data and a bleak economic outlook. In earlier trading, both contracts rose by more than $1, while Brent fell by $1.
At 4:20 PM, Brent crude was down by $0.82 or 0.95 percent to reach $85.09 per barrel, while the US West Texas Intermediate (WTI) was also red at $79.52 per barrel.
Nevertheless, the outlook remains highly uncertain, which should keep oil prices volatile.
The PKR was bearish against some of the other major currencies in the interbank market today. It gained 23 paisas against the Canadian Dollar (CAD), Rs. 1.05 against the Australian Dollar (AUD), Rs. 1.70 against the Euro (EUR), and Rs. 2.17 against the Pound Sterling (GBP).
Conversely, it lost 13 paisas against the UAE Dirham (AED), and 13 paisas against the Saudi Riyal (SAR) in today’s interbank currency market.
