The Pakistani rupee (PKR) reversed losses against the US Dollar and posted gains during intraday trade today.
The Pakistani rupee was initially bearish during the early hours of intraday trade today with the interbank rate losing over Rs. 1 to reach 284 by 11 AM. By 11:25 AM, it went back above 283 and stayed at this level.
At close, the rupee appreciated by 0.15 percent and suspended movement at 282.42 after gaining 43 paisas against the greenback.
The rupee reported gains after three days of consecutive losses today after the federal government late on Wednesday announced another increase in the prices of petroleum products while international prices dropped to their lowest level since 2021.
The rupee is still down over Rs. 50 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 gained over 43 paisas today, noting its first recovery after three days of discouraging losses.
Money changers say the exchange rate was initially headed for another drop today but new clarity on the International Monetary Fund (IMF) agreement and news regarding the imminent $500 million loan from China in the coming days helped ease sentiments.
Pertinently, other commercial loan refinancing and SAFE deposit rollovers are required before the IMF and Pakistani sides can sign the much-awaited staff-level agreement. Pakistani authorities are now anxiously awaiting confirmation from the Kingdom of Saudi Arabia, the United Arab Emirates, and Qatar, as well as the World Bank and the AIIB, to meet their external financing needs for the remainder of the current financial year.
The guarantees for securing external financing are critical for the IMF program’s sustainability, as it is difficult for the State Bank of Pakistan to increase its foreign exchange reserves to $8-10 billion by the end of June 2023, despite projections of $16 billion in August 2022.
The PKR was bullish against all of the other major currencies in the interbank market today. It gained 11 paisas against the UAE Dirham (AED), 12 paisas against the Saudi Riyal (SAR), 76 paisas against the Australian Dollar (AUD), 90 paisas against the Canadian Dollar (CAD), and Rs. 3.48 against the Euro (EUR).
Moreover, it gained Rs. 2.07 against the Pound Sterling (GBP) in today’s interbank currency market.