Rupee Drops Further Against US Dollar, British Pound

The Pakistani rupee dropped further against the US Dollar during intraday trade today after rising as high as 279.75 at 11:45 AM.

The Pakistani rupee was bearish during the afternoon with the interbank rate reversing early-day gains to fall as low as 286 before rebounding back marginally. Open market rates across multiple currency counters still managed between 290-305 while traders expect the exchange rate to observe uncertain trends amid the ongoing Hajj season.

There’s a shortage of Saudi Riyals (SAR) and UAE Dirhams (AED) in the market. Political uncertainty and heavy demand from pilgrims are causing problems for currency dealers.

At close, the PKR depreciated by 0.08 percent and closed at 285.62 after losing 21 paisas today.

Markets were bearish despite early-day gains which saw the PKR gain roughly Rs. 6 against the USD in the first few hours of intraday trade.

The economy is facing severe headwinds amid weak growth prospects, elevated inflation, and heightened uncertainties. Persistently high inflation has prompted aggressive reactions from market players, causing financial conditions to tighten sharply and inadvertently exacerbating debt vulnerabilities.

Traders didn’t take kindly to former Finance Minister Miftah Ismail’s comments from yesterday that foreign exchange reserves held by the State Bank of Pakistan (SBP) will fall below $2 billion by end-September. They said the uncertainty regarding forex reserves, coupled with high inflation and imminent currency shortages due to the Hajj season are some of the few major factors impeding exchange rate progression in the near term. “Long-term forecasts show PKR above 300, possibly 310-315 against the dollar. Politics and the nonserious attitude of institutions are badly impacting trends,” one of them said.

The rupee is down nearly Rs. 59 since January 2023. Since April 2022, it is down over Rs. 106 against the greenback. As per the exchange rate movements witnessed today, the PKR has lost 21 paisas against the dollar today.

The PKR was green against some of the other major currencies in the interbank market today. It gained three paisas against the Australian Dollar (AUD) and 31 paisas against the Euro (EUR).

Conversely, it lost five paisas against the Saudi Riyal (SAR), five paisas against the UAE Dirham (AED), 69 paisas against the Canadian Dollar (CAD), and 70 paisas against the Pound Sterling (GBP) in today’s interbank currency market.

Source: Pro Pakistani