The Pakistani rupee marginally recovered against the US Dollar during intraday trade today after opening trade at 287.5 in the interbank market, initially pushing higher by over 50 paisas.
The Pakistani rupee was stable earlier today with the interbank rate rising as high as 287.15. Open market rates across multiple currency counters (undocumented) still remained above 300 to as high as 308 while a few channels managed 310.
A few documented channels managed as high as 295 against the greenback.
At today’s close, the PKR appreciated by 0.01 percent and closed at 287.22 after gaining 4 paisas today.
Today’s marginal gains come with most traders suggesting reduced demand for USD as a big factor. “The rupee took a breather with little to no traffic at currency counters. Demand for the US dollar has softened but open channels remain as high as they were yesterday,” one of them commented.
Another trader said, “We have a very undervalued PKR these days. The situation since last year has made the currency fall beyond its means but factors like inflation and external pressures seem to have little to no effect on it. Domestic factors like trade, or policy-related discussions on the IMF deadlock are some of the few identified metrics which, against financial norms, are dictating exchange rate trends. Open trade for volumetric growth is key”.
Pertinently, Pakistan’s Real Effective Exchange Rate (REER) jumped by 1.5 percentage points to 87.1 in May 2023.
Pakistan’s current REER value of 87.1 suggests that exports offer better returns, but with raw material and machinery imports currently ‘unreachable’ due to import restrictions, local production is next to nothing. The rupee is at the mercy of losses suffered by the economy as a result of this confinement.
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 four paisas against the dollar today.
The PKR was bullish against most of the other major currencies in the interbank market today. It gained one paisa against the UAE Dirham (AED), two paisas against the Saudi Riyal (SAR), 40 paisas against the Canadian Dollar (CAD), 86 paisas against the Pound Sterling (GBP), and Rs. 2.09 against the Australian Dollar (AUD).
Conversely, it lost seven paisas against the Euro (EUR) in today’s interbank currency market.
