The Pakistani rupee (PKR) achieved further ground against the US Dollar and posted gains during intraday trade today.
The Pakistani rupee was all green during the early hours of intraday trade today with the interbank rate gaining Rs. 4 to reach 279.5 by 11 AM. By 11:25 AM, it went as low as 284.125 before marginally rebounding later.
At close, the rupee appreciated by 0.25 percent and suspended movement at 283.20 after gaining 72 paisas against the greenback.
The rupee reported gains for the second consecutive day today.
The rupee is still down over Rs. 51 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 70 paisas today, noting successive recoveries from Monday’s plunge to 284.03.
Money changers say today’s gains come as markets took a breather with business dealings to pause during bank holidays starting tomorrow. Traders managed to complete credit letters that allowed PKR/USD holders to exchange profits at currency counters, which helped the local unit gain further ground today. However, overall trade numbers are a cause for worry as both imports and exports continue to decline owing to central bank restrictions.
Pertinently, Pakistan’s Real Effective Exchange Rate (REER) decreased by 8 percent to 86.4 in February 2023.
Pakistan’s current REER value of 86.4 suggests that exports offer better returns, but with raw material and machinery imports currently ‘unreachable’ due to import restrictions, local production is next to nothing. Pertinently, Pakistan’s current account deficit (CAD) decreased by 86 percent on a year-on-year (YoY) basis to clock in at $74 million in February. The low CAD is on the back of import restrictions imposed by the government. The restrictions have been in place since June 2022 and since then, restrictions on letters of credit (LCs) have crippled industries dependent on raw material imports.
The PKR was stable against most of the other major currencies in the interbank market today. It gained nine paisas against the Pound Sterling (GBP), 19 paisas against the UAE Dirham (AED), 18 paisas against the Saudi Riyal (SAR), 20 paisas against the Australian Dollar (AUD), and Rs. 1.08 against the Canadian Dollar (CAD).
Conversely, it lost 32 paisas against the Euro (EUR) in today’s interbank currency market.