During intraday trade, the Pakistani rupee experienced a continuation of its downward trend against the US Dollar, opening at 286.05 in the interbank market.At 11 AM, it showed a bearish trend, dropping as low as 287.725 after losing approximately Rs. 1 against the greenback.
Later, between 12:30 PM and 1:15 PM, the rupee declined to the 288 level and remained stable at that level before going back to 287. On the other hand, open market rates (documented) across multiple currency counters were observed in the 291-295 range.
At the close of the day’s trade, the PKR depreciated by 0.39 percent, closing at 287.92 after losing Rs. 1.11 against the dollar. In the informal exchange market, rates initially ranged from 297-302.
The PKR has now experienced a crash for the 7th consecutive day. Additionally, the gap between open market and interbank PKR/USD rates has widened further.
These losses come after the government’s announcement of nominating Finance specialist Ishaq Dar as the potential caretaker Prime Minister of Pakistan over the weekend.
There are discussions about amending the Elections Act 2017 to grant the upcoming caretaker administration the authority to make decisions beyond its constitutional mandate, aimed at boosting the economy and attracting foreign investment for state property/businesses. However, this move has raised concerns among market players, who believe a neutral setup is crucial for overseeing the upcoming General Elections.
Market analysts and traders have expressed expectations of significant turnover from Overseas Pakistanis, which may create challenges due to potential premium rates in informal channels. Unless the State Bank of Pakistan (SBP) intervenes, the black market might thrive and keep the rupee volatile.
Overall, the rupee has depreciated by nearly Rs. 62 since January 2023 and over Rs. 111 against the US Dollar since April 2022.
In the interbank market, the PKR showed a bearish trend against most major currencies today. It lost 29 paisas against the Saudi Riyal (SAR), 30 paisas against the UAE Dirham (AED), 34 paisas against the Australian Dollar (AUD), 47 paisas against the Canadian Dollar (CAD), and 89 paisas against the Pound Sterling (GBP). However, it gained 11 paisas against the Euro (EUR) on the same day.