PKR continues dramatic crash dive
July 22, 2022 (MLN): After the uncertain economic situation and political melancholy caused by a slowdown in the IMF tranche, melting foreign exchange reserves and pressure on the import bill, the Pakistani rupee (PKR) has fallen by 17.4 rupees against the US dollar in five consecutive sessions to settle weekly trading at PKR 228.37 per USD.
During today’s session, the local unit depreciated 1.6 rupees against the dollar as it experienced a volatile trading session with rates in the range of 2.1 rupees per USD, with an intraday high bid of 229 and an intraday low bid of 228.25.
Within the open market, PKR traded at 228.50/230.50 per USD.
The bleak week started with the sharp depreciation resulting from the midterm elections held on Sunday, in which PTI secured 15 seats in an unexpected move, causing significant uncertainty on the economic front as the results of an election would have an impact. on the economic decisions of the ruling party.
All eyes will be on the federal government for the decisions it makes, especially regarding the increase in electricity/gas prices, as approval of the next IMF tranche would be dependent on such important measures agreed with the IMF agreed, said analyst at Topline Securities.
On the other hand, Zafar Paracha, chairman of the Exchange Companies Association of Pakistan (ECAP), told Mettis Global: “Under the current macros in which the oil price in the international market is falling, the PKR should be no more than 190 per USD. “
No major government move to halt the PKR’s free fall indicates that the currency’s depreciation could be part of the IMF deal and if the situation remains the same, the PKR will be expected to decline in the coming days. continue to decline, he added.
The government must immediately curb their unnecessary spending to avoid further indebtedness to the country or the country would face a deteriorating public order situation, he suggested.
According to experts, the dollar is seen as a safe haven during the global recession, causing demand for the dollar to skyrocket against almost all major currencies. PKR is no exception.
However, the political uncertainty on the local front has added fuel to the fire, increasing demand for dollars in the interbank market and fueling the element of speculation.
The corporate sector also claimed that commercial banks are involved in dollar speculation. Therefore, they called for the intervention of the Competition Commission of Pakistan (CCP) to solve this problem.
Given the dire economic situation of the country, Businessmen Group (BMG) Chairman Zubair Motiwala and Karachi Chamber of Commerce & Industry (KCCI) President Muhammad Idrees demanded on Thursday to immediately declare a financial emergency and fix the dollar’s exchange rate for at least one month.
They also demanded that SBP intervene to counter the fall of the currency.
In CYTD, the local unit plunged Rs51.85 or 22.71% against the USD while registering a 10.30% decline against the dollar in MTD, according to data collected by Mettis Global.
Over the past 52 weeks, PKR has lost 29.40% against the greenback, reaching its low of 228.36 on July 22, 2022 and high of 161.22 on July 26, 2021.
In addition, since its high on July 26, 2021, the local unit has weakened by 18.15% and 18.79% against EUR and GBP respectively.
Local unit performance remained bleak against other major currencies in CYTD as the currency lost value by 22.71%, 22.64%, 18.27%, 17.93%, 13.94%, 12 .81% and 7.75% against AED, SAR, CHF, CNY, EUR, GBP and JPY, respectively.
Meanwhile, the currency lost 2.8 rupees against sterling as the day’s closing rate was PKR 273.28 per GBP, while the previous session ended at PKR 270.52 per GBP.
Similarly, PKR’s value weakened 97 paisa against EUR, which closed today at PKR 231.97 at the interbank.
On the other hand, the State Bank of Pakistan (SBP) conducted an open market operation (OMO) within the money market in which it took Rs918.5 billion from the money market at 14.9% for 6 days.
The overnight repo rate at the end of the session was 14.50/15%, while the 1-week rate was 13.95/14.05%.
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Posted on: 2022-07-22T17:31:14+05:00
This post PKR Continues Dramatic Crash Dive, Drops Rupees 17.4 in Week
was original published at “https://mettisglobal.news/pkr-continues-dramatic-crash-dive-tumbles-by-17-4-rupees-in-a-week/”