Rupee Reverses Friday’s Gains Against US Dollar As Uncertainty Reigns Supreme

The Pakistani rupee (PKR) reversed gains against the US Dollar and posted big losses during intraday trade today.

The Pakistani rupee was all red during the early hours of intraday trade today with the interbank rate losing over Rs. 3 to reach 284 by 11 AM. By 11:25 AM, it cooled off to 281 and stayed at this level.

At close, the rupee depreciated by 0.30 percent and suspended movement at 281.61 after losing 83 paisas against the greenback.

The rupee reported losses today after the government on Sunday released the Toshakhana records received by public office holders from foreign governments and dignitaries since 2002.

The rupee is down over Rs. 49 since its record-breaking single-day drop of Rs. 25 in the last week of January and has since then played in mostly red due to immense economic pressure. As per exchange rate movements witnessed today, the PKR has lost over 80 paisas today, noting a decline from Friday’s gains to 280 against the USD.

Money changers say markets were thrown off in a frenzy after surprising political movements witnessed over the weekend, including today. In terms of other metrics, they said uncertainty over the country’s debt obligations was putting a lot of pressure on the rupee-dollar trade.

Bank of America economists are of the view Pakistan will have no choice but to suspend debt repayments if it fails to secure a $1.1 billion bailout from the International Monetary Fund (IMF) at the earliest. They said in a statement, “China holds the key for relief in the near term as it is the largest creditor. With closer ties between China and Pakistan, the hope is rising for China to come on board to provide a backstop to its long-time ally”.

The PKR was bearish against all of the other major currencies in the interbank market today. It lost 22 paisas against the UAE Dirham (AED), 23 paisas against the Saudi Riyal (SAR), Rs. 1.57 against the Australian Dollar (AUD), Rs. 1.71 against the Canadian Dollar (CAD), and Rs. 2.9 against the Euro (EUR).

Moreover, it lost Rs. 4.35 against the Pound Sterling (GBP) in today’s interbank currency market.

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