July 14, 2022 (MLN): Owing to the release of an official statement by IMF pertaining to staff level agreement, the Pakistani rupee (PKR) in the interbank market witnessed a gain of 30 paisa against the greenback as the currency settled the trade at PKR 209.8 compared to the previous closing of 210.1 per USD.
During the intraday trade, the local unit observed a massive recovery of 1.6 rupees, showing an intraday high bid of 210.10 and an intraday low offer of 209 while in the open market, PKR was traded at 208/210 per USD.
However, by the time of closing trade, the currency managed to gain only 30 paisa as the uncertainty in the market has not yet been wiped off entirely.
Saad Hashmi, Head of Research at BMA Capital told Mettis, “The interbank market will gain back its confidence gradually after the approval of IMF’s executive board and accumulation in forex reserves after receiving the fund.”
He also added that there is room for PKR to appreciate further as PKR is undervalued in terms of the Real Effective Exchange Rate (REER).
Earlier, the IMF team, led by Nathan Porter, IMF Mission Chief reached a staff-level agreement (SLA) with the Pakistan authorities for the conclusion of the combined seventh and eighth reviews of the Extended Fund Facility (EFF)-supported program.
According to Nathan Porter, Pakistan will receive $1.177 billion after the approval of the IMF’s Executive Board, bringing total disbursements under the program to about $4.2 billion.
In CYTD, the local unit plummeted by Rs33.29or 15.87% against the USD while it registered a decline of 2.36% against the greenback in MTD, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 24.07% against the greenback while reaching its lowest at 211.93 on June 22, 2022, and the highest of 159.30 on July 15, 2021.
Furthermore, the local unit has weakened by 10.38% and 11.44% against EUR and GBP, respectively since its high on July 15, 2021.
The performance of the local unit remained bleak against other major currencies in the last seven sessions as the currency lost its value by 0.90%, 0.90%, 0.43%, and 0.40% against AED, SAR, CNY, and GBP, respectively. On the other hand, PKR appreciated against JPY, EUR, and CHF by 1.10%, 0.70%, and 0.35%, respectively.
Meanwhile, the currency gained 74 paisa against the Pound Sterling as the day's closing quote stood at PKR 249.07 per GBP, while the previous session closed at PKR 249.8 per GBP.
Similarly, PKR's value strengthened by 28 paisa against EUR which closed at PKR 210.6 at the interbank today.
On another note, within the money market, the overnight repo rate towards the close of the session was 14.10/14.25 percent, whereas the 1-week rate was 14.20/14.30 percent.
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