The Pakistani rupee rebounded against the US Dollar during intraday trade today after opening trade at 287.5 in the interbank market, pushing higher by over Rs. 4 in a matter of hours.
The Pakistani rupee was bullish all day with the interbank rate rising as high as 283.425 and staying at that level. Open market rates across multiple currency counters (undocumented) still remained above 300 to as high as 309 while a few channels managed 311.
Pertinently, a few documented channels managed as high as 295 against the greenback.
At today’s close, the PKR appreciated by 0.28 percent and closed at 287.18 after gaining 79 paisas today.
PKR gains were somewhat welcomed by traders saying that despite the massive gap, open and interbank rates were gradually converging. “Demand for the US Dollar in the market has dropped for the first time since Hajj fever. Despite this, expect the exchange rate to be under pressure tomorrow. We made a substantial payment on maturity to China, and central bank reserves have dropped below $3 billion without near-term security on external inflows from creditors who are refusing assistance without the IMF’s say-so. Continuing engagement with the IMF would encourage financing from bilateral partners,” one of them commented.
Pertinently, authorities successfully paid off a Chinese commercial loan of $1 billion on Monday. A top-level harbinger working in Islamabad confirmed that the government is working to get another rollover and Chinese authorities have signaled intent in its favor.
Only 17 days remain till the IMF’s current program expires, and the government has made one final attempt to acquire $1.2 billion from the remaining $2.6 billion in loans. The entire cost of the program is $6.5 billion, with $3.9 billion already dealt with.
Another trader said, “FY24 will be a roller-coaster. Money players see businesses gasping for air till the October-December quarter, but look forward to making capital and the rupee back in recovery mode. The tricky part would be settling $23 billion in external debt payments during the period. Things could go south very easily”.
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 gained 79 paisas against the dollar today.
The PKR was bullish against most of the other major currencies in the interbank market today. It gained 21 paisas against the Saudi Riyal (SAR), 21 paisas against the UAE Dirham (AED), 34 paisas against the Australian Dollar (AUD), and Rs. 1.02 against the Euro (EUR).
Conversely, it lost 42 paisas against the Canadian Dollar (CAD) and 89 paisas against the Pound Sterling (GBP) in today’s interbank currency market.
Day by day playing with currency rates leads us to the point of no return. IMF demanded further clarification on budget but don’t how anyone can think it’s deal if closing soon? From past several months hide and seek with the lender results is billions of loss in remittances due to 20+ gap in open and interbank rate.