The Pakistani rupee gained further ground against the US Dollar during intraday trade today after opening trade at 287.45.
The Pakistani rupee initially red during the afternoon with the interbank rate falling as low as 287.95 before rebounding back massively. However, open market rates across multiple currency counters managed between 307-315 while traders expect the interbank/market rate to increase further amid the ongoing Hajj season.
The informal exchange rate was trading above 310 like yesterday to as high as 320 with informal imports gaining traction while foreign currency shortages due to Hajj season and the government’s bold GDP estimates surprised markets. Today’s cash rate per dollar in hawala averaged 310 while for telex transfers it went up to 320.
At close, the PKR appreciated by 0.49 percent and closed at 285.74 after gaining Rs. 1.39 today.
The Rupee managed to close in the green today despite early-day losses which saw the PKR lose roughly Rs. 1 against the USD after opening at the 287 level.
Traders were left astonished at the country’s latest economic data which shows unrealistic growth projections for the outgoing fiscal year. They said it’s like the government is avoiding triggering another default gossip by offsetting economic slowdown with unverifiable growth projections. “The state wants to be clever. Instead of actually admitting to the IMF that the country has defaulted/nearly defaulted, the Finance Minister wants to avoid the issue altogether and paint a canvas with limestone instead of pigment. It looks like the authorities are aiming for a quick debt reprofile after getting their hands on a couple billion dollars. Today’s gains show markets reacted positively to this possibility, which is disturbing,” one of them contended.
The final growth rate of GDP for the year 2021-22 has been estimated at 5.77 percent which was 5.74 percent in the revised estimates. The revised growth rate of GDP for the year 2021-22 is 6.10 percent which was provisionally estimated at 5.97 percent.
Experts suggest the real growth rate is somewhere between -1 and -3 percent, contrary to estimates by the government.
Despite today’s gains, the rupee is down nearly Rs. 59 since January 2023. Since April 2022, it is down over Rs. 107 against the greenback. As per the exchange rate movements witnessed today, the PKR has gained Rs. 1.389 against the dollar today.
The PKR was green against the other major currencies in the interbank market today. It gained 37 paisas against the Saudi Riyal (SAR). 37 paisas against the UAE Dirham (AED), Rs. 1.87 against the Canadian Dollar (CAD), Rs. 2.28 against the Australian Dollar (AUD), and Rs. 2.86 against the Euro (EUR).
Moreover, it gained Rs. 3.11 against the Pound Sterling (GBP) in today’s interbank currency market.
Govt forced people to switch to hundi for better rates.