The Pakistani rupee halted its neck-breaking fall against the US Dollar today after opening trade at 304 in the interbank market.
At 12 PM, it was bearish, falling as low as 307.925 after losing ~Rs. 4 against the greenback, in tandem with opening-bell bears.
Later, it went back to the 305 level between 1:30 PM and 2:30 PM before anchoring trends for the remainder of the day.
Since the caretaker government came to power, the USD has gained Rs. 16.02 against the PKR.
Open market rates (documented) across multiple currency counters stood in the 308-314 range.
At close, the PKR appreciated by 0.02 percent to close at 305.47 after gaining seven paisas against the dollar today.
The black market rate has also moved further away from the Bank rate and trades in the 325-331 band. Meanwhile, currency dealers expect slowed slippages until the PKR finds a comfortable level to form resistance at. September may see multiple record lows of somewhere between 310-320, in sync with the losing trend of August unless macros improve.
Pertinently, the rupee is down nearly Rs. 85 since January 2023. Since April 2022, it is down over Rs. 132 against the greenback. As per exchange rate movements witnessed today, the PKR has gained seven paisas against the dollar.
So far in 2023, the rapid decline in the value of the Pakistani Rupee is attributable to a combination of premature relaxation of imports, weakening exports, and diversion of home remittances to hawala, which in turn feeds the strong demand for US dollars by smugglers and the informal/under-invoiced traders.
The Pakistan Business Council terms this exchange rate plunge as a perfect storm for Pakistan’s economy.
A trader told ProPakistani that gradual pullbacks from SBP reserves every week show the declining level of documented dollar volume of the state, as the prevalent popularity of hawala has tempted both buyers and sellers to exchange/transfer their monies in exchange for higher gains. The black rate, currently above 330 at day’s high on Friday, shows that the bank/free rate gap has expanded by Rs. 26, nullifying the regulator’s aim to bring the rupee/$ to the same level for all channels.
The PKR was green against most of the other major currencies in the interbank market today. It gained one paisa against the Australian Dollar (AUD), one paisa against the Saudi Riyal (SAR), two paisas against the UAE Dirham (AED), 54 paisas against the British Pound (GBP), and Rs. 1.17 against the Euro (EUR).
Conversely, it lost 60 paisas against the Canadian Dollar (CAD) in today’s interbank currency market.
Source: ProPakistani