The Pakistani rupee nosedived against the US Dollar today after opening trade at 288 in the interbank market.
At 12 PM, it was bearish, falling as low as 298 after losing ~Rs. 10 against the greenback, shedding opening-bell momentum.
Later, it went back to the 296 level between 1:30 PM and 2:30 PM and anchored trends for the remainder of the day, before re-entering the 297 level.
Open market rates (documented) across multiple currency counters stood in the 300-304.45 range.
At close, the PKR depreciated by 0.45 percent to close at 297.13 after losing Rs. 1.35 against the dollar today.
US Dollars continue to get priced at extremely volatile premiums in the open market in the new week and are expected to expand further during the financial year 2023-24. Today’s drop was seen as a resumption of the PKR’s declining run against the greenback as it edges closer to 300.
Trends have remained largely red since July after the International Monetary Fund approved a new $3 billion bailout deal for Pakistan. Initially, the PKR rose as high as 275.4, with prominent analysts and Malik Bostan at the time tipping the local currency to rise above 250. However, the US Dollar interbank rate is up by ~Rs. 23 since then.
The black market rate has also moved further away from the Bank rate and trades in the 310-315 band. Meanwhile, currency dealers expect further slippage before August draws to a close next week.
Pertinently, the rupee is down nearly Rs. 78 since January 2023. Since April 2022, it is down over Rs. 125 against the greenback. As per exchange rate movements witnessed today, the PKR has lost Rs. 1.35 against the dollar.
Meanwhile, Pakistan’s Real Effective Exchange Rate (REER) shot up by 3.86 percentage points to 91.59 in July 2023.
Pakistan’s current REER value of 91.59 suggests that exports offer good returns on paper, but with raw material and machinery imports currently below par despite the easing of import restrictions, local production is struggling to revive itself. The federal government lifted all restrictions on imports almost 2 months ago and it will take some time until manufacturers get the right volume for reviving production.
The PKR was red against all of the other major currencies in the interbank market today. It lost 88 paisas against the Australian Dollar (AUD) and Rs. 2.10 against the British Pound (GBP).
Moreover, it lost 35 paisas against the Saudi Riyal (SAR), 37 paisas against the UAE Dirham (AED), Rs. 1.29 against the Canadian Dollar (CAD), and Rs. 1.85 against the Euro (EUR) in today’s interbank currency market.
no surprises here , its all part of the IMF agreement that Pakistan has to devalue its currency. Rs 350 to dollar is the target
most people keeping money abroad especially in uae , uk , Singapore , Malaysia and tax free islands