The Pakistani rupee fell further 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 falling as low as 288.5 and staying at that level. Open market rates across multiple currency counters remained above 300 and multiple counters still managed rates as high as 312 while a few channels managed 315.
At today’s close, the PKR depreciated by 0.24 percent and closed at 287.63 after losing 70 paisas today.
PKR losses were expected with traders suggesting bears to reign supreme today after Friday’s budget reveal. One trader told ProPakistani that demand-side pressures as a result of no proposal on forex support will have lasting effects on the PKR. “Dar in his latest budget reel has planned substantial external debt estimates but offers no support for backing them on maturity. Recent pledges from so-called friendly creditors won’t help. This is a debt trap at its best; the worst, as we see it, would be the PKR to drop below 320,” he commented.
Pertinently, Pakistan must satisfy the IMF on the federal budget consistent with the lender’s objectives. The federal government has offered some tax breaks and set a massive revenue collection target but needs a nod of approval from the Fund to make the budget operational.
Finance Minister Ishaq Dar recently asserted that some hidden hands were involved in purposefully undervaluing the Pakistani rupee. According to the minister, the PKR is grossly undervalued by at least Rs. 45 versus the US dollar.
On the subject of IMF’s expectations for budget 2023-24, one trader said, “Growth targets aren’t complimenting Friday’s budget reveal. Like it or not, a sentiment-driven exchange rate market like Pakistan will always be impacted by unsupported economic policies. Expect mini-budgets after interim setups takeover after a few months”.
Overall, the rupee is down nearly Rs. 62 since January 2023. Since April 2022, it is down over Rs. 110 against the greenback. As per the exchange rate movements witnessed today, the PKR has lost 70 paisas against the dollar today.
The PKR was bearish against all of the other major currencies in the interbank market today. It lost Rs. 1.91 against the Australian Dollar (AUD), Rs. 1.05 against the Euro (EUR), 88 paisas against the Canadian Dollar (CAD), and Rs. 2.07 against the Pound Sterling (GBP).
Moreover, it lost 18 paisas against the Saudi Riyal (SAR) and 18 paisas against the UAE Dirham (AED) in today’s interbank currency market.