Rupee Falls 6th Day in a Row Against US Dollar

The Pakistani rupee close the week with losses against the US Dollar during intraday trade today after opening trade at 285 in the interbank market.

At 11 AM, the situation was bearish as the value dropped to 286.725 against the greenback, losing around 60 paisas.

Later, it dropped to the 287 level between 12:30 PM and 1:15 PM and stayed at that level, before going back to 286.

Open market rates (documented) across multiple currency counters stayed in the 290-298 range.

The Pakistani currency (PKR) lost value today, dropping by 0.58 percent to close at 286.81 against the US dollar. It lost Rs. 1.66 in value compared to yesterday.

Informal exchange rates were initially around 296-301 PKR per dollar.

In the Hundi market, the cash rate for a dollar ranged from 298 to 305 PKR, but some unofficial sources reported rates as high as 309 PKR.

This is the 6th consecutive day of the PKR losing value, and the difference between the open market and interbank PKR/USD rates is getting bigger.

Meanwhile, China has consented to extend the deadline for repayment of Pakistan’s publicly guaranteed debt of over $2 billion by two more years. This is a positive development as the current stock of forex reserves held in SBP is expected to stay above $8.5 billion till next week’s update.

Pertinently, the foreign exchange reserves held by the central bank soared by over 90 percent on a weekly basis due to inflows from Saudi Arabia, United Arab Emirates (UAE), and the International Monetary Fund (IMF).

On July 14, the State Bank of Pakistan (SBP) held foreign currency reserves worth $8.727 billion, which increased by $4.2 billion compared to the previous week’s $4.524 billion on July 7. The country’s total liquid foreign currency reserves, including reserves held by other banks besides SBP, reached $14.065 billion, rising by $4.227 billion from the previous week.

According to a trader, abnormal premiums were causing significant distortions in the black market, particularly on Thursday.

“Exchange rate controls are 90% at the mercy of market forces and movements suggest the next PKR/USD defense line at 290, or in the worst case, ~296. Volatility due to uncertainty and moods over upcoming General Elections are also putting pressure on the local unit,” he remarked.

Overall, the rupee is down nearly Rs. 61 since January 2023. Since April 2022, it is down over Rs. 110 against the greenback. As per the exchange rate movements witnessed today, the PKR has lost Rs. 1.66 against the dollar today.

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