The Pakistani rupee lost further ground against the US Dollar during intraday trade today after opening trade at 287.5 in the interbank market.
The Pakistani rupee was bearish all day with the interbank rate falling as low as 288.725 and staying at that level. Open market rates across multiple currency counters remained above 300 and multiple counters still managed rates as high as 311 while a few channels managed 316.
Pertinently, a few documented channels managed as high as 297 against the greenback.
At today’s close, the PKR depreciated by 0.12 percent and closed at 287.97 after losing 34 paisas today.
PKR losses were in line with market expectations with traders saying the State Bank of Pakistan’s (SBP) unhinged market review painted a bad picture for economic indicators in the coming months despite bleak expectations of easement in demand-side pressures. “Sequential ease in inflation expectations of both consumers and businesses from their recent peaks is a pipedream. SBP must adopt stringent mechanisms for managing the exchange rate and help document currency channels. The current money slump in the economy is cancer to the PKR,” one of them commented.
Pertinently, SBP said in its market review on Monday that debt repayments amid lower fresh disbursements and weak investment inflows continue to exert pressure on the FX reserves.
The MPC expects that reduced demand-side pressures and ease in inflation expectations, along with moderating global commodity prices and high base effect, would help bring inflation down from June 2023 onwards. In this context, the MPC views that maintaining the current policy stance is necessary to bring inflation down to the medium-term target range of 5 – 7 percent by the end of FY25.
On the subject of budget 2023-24, one trader said, “The business of forex exchange is a tricky field. In short, for the PKR to start showing consistent growth, wealth generation must resume on a full scale. Instead of targeting the industry, the government must focus on incentivizing exports and opening trade avenues for ease of doing business. This would help improve the economy, and set the rupee on a growth spurt like never before”.
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 34 paisas against the dollar today.
The PKR was bearish against most of the other major currencies in the interbank market today. It lost nine paisas against the Saudi Riyal (SAR), nine paisas against the UAE Dirham (AED), 59 paisas against the Australian Dollar (AUD), and Rs. 1.25 against the Euro (EUR).
Conversely, it gained 22 paisas against the Pound Sterling (GBP) and 25 paisas against the Canadian Dollar (CAD) in today’s interbank currency market.