The Pakistani rupee nosedived to a new record low against the US Dollar today, making history after opening trade at 297.8 in the interbank market.
At 12 PM, it was bearish, falling as low as 298 after losing ~Rs. 1 against the greenback, giving in to opening-bell bears.
Later, it crashed to the 299 level between 1:30 PM and 2:30 PM and anchored trends for the remainder of the day.
Open market rates (documented) across multiple currency counters stood in the 303-308 range.
At close, the PKR depreciated by 0.63 percent to close at 299.01 after losing Rs. 1.87 against the dollar today.
Traders expected to see the much-dreaded 300 in the interbank today. “A little drama right at the end, but we expect to see 300 tomorrow and a small resistance to fight that drop before the local unit forms resistance. Expect the rupee to temporarily halt further drops after crossing 300,” one of them said.
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. 25 since then.
The black market rate has also moved further away from the Bank rate and trades in the 312-318 band. Meanwhile, currency dealers expect further slippage tomorrow. August may see multiple record lows of somewhere between 300-305.
Pertinently, the rupee is down nearly Rs. 80 since January 2023. Since April 2022, it is down over Rs. 127 against the greenback. As per exchange rate movements witnessed today, the PKR has lost Rs. 1.87 against the dollar.
In a key development, data issued by the Economic Affairs Division (EAD) revealed that Pakistan borrowed $2.891 billion in July 2023 from multiple financing sources against the annual budget estimates of $17.62 billion for the current fiscal year 2024.
The government has budgeted $17.619 billion from multiple financing sources for the current fiscal year including $17.384 billion in loans and $234.60 million in grants. A few analysts have pointed out debt pressures as some of the major factors that could hurt the PKR in 2023-24.
The PKR was red against all of the other major currencies in the interbank market today. It lost Rs. 2.29 against the Australian Dollar (AUD) and Rs. 4.17 against the British Pound (GBP).
Moreover, it lost 49 paisas against the Saudi Riyal (SAR), 50 paisas against the UAE Dirham (AED), Rs. 1.33 against the Canadian Dollar (CAD), and Rs. 2.93 against the Euro (EUR) in today’s interbank currency market.
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