The Pakistani rupee (PKR) reversed losses against the US Dollar and posted gains during intraday trade today.
The Pakistani rupee was largely stable during the early hours of intraday trade today with the interbank rate initially losing 90 paisas to reach 284 by 11 AM. By 13:25 PM, it recovered back to the 283 level and stayed on it.
At close, the PKR appreciated by 0.09 percent to close at 283.66 after gaining 26 paisas during intraday trade today.
The rupee reported gains today after market forces on Tuesday estimated an increase in the policy rate by 200 bps in the upcoming Monetary Policy Committee (MPC) meeting, according to a poll conducted by Topline Research.
Average inflation this year is now expected in the range of 27–29 percent against the November 2022 projection of 21–23 percent. In this context, every market review so far has repeatedly emphasized that anchoring inflation expectations is critical and warrants a strong policy response.
The rupee is still down nearly Rs. 52 since January 2023. As per exchange rate movements witnessed today, the PKR has gained some ground today, noting a surge of over 25 paisas.
Money changers say today’s gains reflect exchange companies’ confidence that they can provide $1 billion per month for the next 2 years.
Others said Ishaq Dar’s latest theatrics at the Senate session today could reverse today’s gains on Friday. The finance minister failed to provide a timetable for when the staff-level agreement (SLA) with the International Monetary Fund (IMF) would be signed.
Dar also asserted without any context that the country would not default on its payments. Money changers say Dar’s IMF fiasco is a big headache for cash counters as foreign channels sometimes delay the flow if the forecast becomes vaguer.
The PKR was bearish against most of the other major currencies in the interbank market today. It lost 28 paisas against the Euro (EUR), 30 paisas against the Pound Sterling (GBP), 83 paisas against the Australian Dollar (AUD), and 86 paisas against the Canadian Dollar (CAD).
Conversely, it gained three paisas against the Saudi Riyal (SAR) and seven paisas against the UAE Dirham (AED) in today’s interbank currency market.