Rupee Reverses Last Week’s Gains Against US Dollar, Saudi Riyal

The Pakistani rupee reversed last week’s gains against the US Dollar during intraday trade today after opening trade at 285.65.

The Pakistani rupee was unable to build on last week’s recoveries during the afternoon with the interbank rate falling as low as 286 before rebounding back a level. However, open market rates across multiple currency counters stayed on the 308-318 level.

The informal exchange rate was trading above 310 as seen throughout May to as high as 320 with the frenzy of Hajj season and economic crisis piling the pressure. Today’s cash rate per dollar in Hawala averaged 310.

At close, the PKR depreciated by 0.09 percent and closed at 285.42 after losing 27 paisas today.

The Rupee was bearish today after early-day losses which saw the PKR lose roughly Rs. 1 against the USD after opening at the 285 level.

Traders bemoaned today’s drop, but expected bears to be in control after Finance Minister Ishaq Dar’s remarks earlier today. “The government doesn’t know when the IMF will come to Pakistan’s aid. Dar is playing a dangerous game. We don’t expect bailouts before June but hope for elections in the coming months. More uncertainty would kill sentiments and unhinge the PKR freefall,” one of them remarked.

Earlier this month, the Reform and Revenue Mobilisation Commission (RRMC) said it wants to levy income tax at the rate of 5 percent for listed companies and 7.5 percent for non-listed companies on their distributable reserves. The RRMC suggested taxing reserves as an advance tax on dividends to be paid by companies to shareholders in the future.

“Companies could plan contingency cash dumps to avoid the additional tax net. Reallocating attributable revenue under the guise of safeguarding local expansionary prospects would wreak havoc. Next budget should offer incentives instead of tax bombs,” another trader said.

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 lost 27 paisas against the dollar today.

The PKR was red against most of the other major currencies in the interbank market today. It lost six paisas against the Saudi Riyal (SAR). six paisas against the UAE Dirham (AED), 12 paisas against the Pound Sterling (GBP), 51 paisas against the Australian Dollar (AUD), and 63 paisas against the Canadian Dollar (CAD).

Conversely, it gained 11 paisas against the Euro (EUR) in today’s interbank currency market.

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