Rupee Falls Against US Dollar, Saudi Riyal As Markets Brace for Budget Week

The Pakistani rupee lost further ground against the US Dollar during intraday trade today after opening trade at 286.8 in the interbank market.

The Pakistani rupee was bearish in the first few hours with the interbank rate dropping as low as 288 and staying at that level. Open market rates across multiple currency counters remained in the 293-299 gap but multiple counters still managed rates above 300 to as high as 309. Pertinently, the Hajj rush and informal imports continue to take a toll on currency counters.

Open market rates gained over Rs. 27 to as high as 290.25 last week.

At today’s close, the PKR depreciated by 0.18 percent and closed at 286.19 after losing 51 paisas today.

The exchange rate initially lost ground and at 11:30 AM fell to the 288 level. Despite regulatory attempts to curb interbank/open market gaps, today’s cash rate per dollar in Hundi is still above 310; many suggest it will remain above the current level this week despite restricted exchange business being conducted since May.

Dollar buying was a sight for sore eyes today with traders avoiding releasing USD cash flow as markets struggle to cope with the new interbank/open market settlement rule. Meanwhile, hoarders are frequenting Hundi channels to stay ahead of the interbank curve.

One trader told ProPakistani that the interbank volume is expected to take bigger hits despite central bank bid to adjust the exchange rate. “Budget news will scatter sentiments but temporary respite is expected with prospectus inflows from Saudi Arabia and regulated flow of currency through border channels. We won’t see the IMF this month; perhaps July will offer a clear picture of where we’re headed. For now, the rupee will remain in red,” he said.

Another trader suggested that despite the daily drops in valuation, the PKR has corrected course with market forces dictating trends.

Overall, the rupee is down nearly Rs. 61 since January 2023. Since April 2022, it is down over Rs. 109 against the greenback. As per the exchange rate movements witnessed today, the PKR has lost 51 paisas against the dollar today.

The PKR was bearish against some of the other major currencies in the interbank market today. It lost 14 paisas against the Saudi Riyal (SAR), 14 paisas against the UAE Dirham (AED), and 21 paisas against the Canadian Dollar (CAD).

Conversely, it gained 11 paisas against the Australian Dollar (AUD), Rs. 1.42 against the Euro (EUR), and Rs. 2.76 against the Pound Sterling (GBP) in today’s interbank currency market.

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