The Pakistani rupee reversed its 4-day losing streak against the US Dollar after opening trade at 280 in the interbank market.
It was largely stable against the greenback today after Moody’s Investors Service (Moody’s) changed its outlook on the banking sector of Pakistan (Caa3 stable) to stable from negative.
The interbank rate stayed at 280 most of the day before closing at the 279 level. Open market rates across multiple currency counters were in the 279-280 range today.
The PKR appreciated by 0.02 percent to close at 279.28 after gaining seven paisas against the dollar today.
On a fiscal year-to-date basis, the rupee has so far appreciated by 2.38 percent.
Overall, the rupee is down nearly Rs. 52.92 since January 2023. Since April 2022, it is down Rs. 97.12 against the greenback. As per the exchange rate movements seen today, the PKR gained seven paisas today.
Moody’s said that the banks’ solid profitability and stable funding and liquidity provide an adequate buffer to withstand the country’s macroeconomic challenges and political turmoil.
It further said that economic and fiscal pressures are easing, and it forecasts the Pakistani economy will return to modest growth of 2% in 2024 after subdued activity in 2023, and inflation to fall to around 23 percent from 29 percent last year.
Pakistani banks remain highly exposed to the government via large holdings of government securities that amount to around half of total banking assets, which links their credit strength to that of the sovereign, it added.
Persistent external pressures against a challenging operating backdrop will weigh slightly on the performance of Pakistani banks’ loan portfolios.
The PKR was green against some of the other major currencies in the interbank market today. It gained one paisa against the UAE Dirham (AED) and two paisas against the Saudi Riyal (SAR).
Meanwhile, it lost 52 paisas against the British Pound (GBP), 82 paisas against the Euro (EUR), Rs. 1.17 against the Canadian Dollar (CAD), and Rs. 1.97 against the Australian Dollar (AUD) in today’s interbank currency market.
