Rupee Down 3rd Day in a Row Against US Dollar As Pressure Mounts

The Pakistani rupee lost further ground against the US Dollar during intraday trade today after opening trade at 286.2 in the interbank market.

The Pakistani rupee was initially stable in the first few hours with the interbank rate rising as high as 285.47 and staying at that level. Open market rates across multiple currency counters remained above 295 and multiple counters still managed rates above 300 to as high as 310.

At today’s close, the PKR depreciated by 0.13 percent and closed at 286.56 after losing 37 paisas today.

The exchange rate initially lost ground and at 11:30 AM fell to the 287 level. Today’s cash rate per dollar in Hundi is above 312; the current level could rise as high as 315 by the end of this week as agents seek higher margins against the State Bank of Pakistan’s new dollar settlement rule.

PKR gains were bleak with traders avoiding releasing USD cash flow as markets weighed news regarding the outgoing government’s attempt to rescue the remaining $2 billion in external financing to restart its delayed bailout program with the International Monetary Fund (IMF).

The Ministry of Finance (MoF) said in an emailed response that the country has assurances of $4 billion in funding and intends to reach an agreement with the IMF before releasing the budget for 2023-24 on Friday, June 9.

One trader told ProPakistani that uncertainty is a deciding factor for exchange rate movement as it has been the case for the past several months. “Market functioning for ideal currency rates is a pipe dream. We need a double-digit reserve count to stabilize the PKR back above 250, which is not possible in the current fiscal situation. News about an agreement with the IMF this week was a laughing stock for traders today. We don’t expect much on the interbank side, there’s a lot of potential in the informal channel, and most of us don’t mind taking a switch every now and then,” he said.

Quoting an IMF news report, another trader suggested that the IMF loan is critical in overcoming the currency crisis, alleviating supply shortages, and pulling the economy out of default risk before elections later this year.

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 37 paisas against the dollar today.

The PKR was bearish against all of the other major currencies in the interbank market today. It lost 10 paisas against the Saudi Riyal (SAR), 10 paisas against the UAE Dirham (AED), and 46 paisas against the Canadian Dollar (CAD).

Moreover, it lost 48 paisas against the Euro (EUR), 82 paisas against the Pound Sterling (GBP), and Rs. 2.03 against the Australian Dollar (AUD) in today’s interbank currency market.

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