No Respite As Rupee Again Falls Against US Dollar

The Pakistani rupee reversed gains against the US Dollar during intraday trade today after opening trade at 287.225 in the interbank market, initially pushing higher by over Rs. 5 in a matter of hours.

The Pakistani rupee was bullish earlier today with the interbank rate rising as high as 282.86 and staying at that level. However, open market rates across multiple currency counters (undocumented) still remained above 300 to as high as 310 while a few channels managed 312.

A few documented channels managed as high as 297 against the greenback.

At today’s close, the PKR depreciated by 0.07 percent and closed at 287.37 after losing 19 paisas today.

PKR losses were expected by traders who recalled yesterday’s forecast of bears fighting back against the exchange rate. “Government liquidity and external vulnerability pressures are once again pulling the rug from below. The IMF has issued its clearest response to Pakistan on issues with the budget for FY24, which prompted additional projections of unlikely access to market financing at cheap rates. Banks won’t help; our bonds are uncertain. Sentiments are painting a red canvas and the PKR will continue to get splashes unless macros improve,” one of them commented.

Pertinently, the IMF on Wednesday raised serious objections to the federal budget for fiscal year 2023-24.

“The new tax amnesty runs against the program’s conditionality and governance agenda and creates a damaging precedent. Measures to address the energy sector’s liquidity pressures could be included alongside the broader budget strategy. The IMF team stands ready to work with the government in refining this Budget ahead of its passage,” the lender’s resident rep in Pakistan Esther Perez Ruiz said in a statement.

Another trader said, “Rating agencies are ringing up default bells while Ishaq Dar continues to deny the possibility. A default event would, if hidden, could permanently damage the PKR”.

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 lost 18 paisas against the dollar today.

The PKR was bearish against most of the other major currencies in the interbank market today. It lost four paisas against the UAE Dirham (AED), five paisas against the Saudi Riyal (SAR), 96 paisas against the Pound Sterling (GBP), Rs. 1.03 against the Euro (EUR), and Rs. 1.11 against the Australian Dollar (AUD).

Conversely, it gained 43 paisas against the Canadian Dollar (CAD) in today’s interbank currency market.

Source: Pro Pakistani