PKR gains 2.5 rupees in interbank, 23 rupees in open market against USD in a week

September 08, 2023 (MLN): The Pakistani rupee (PKR) appreciated by 2 rupees against the US dollar in Friday's interbank session as the currency settled the trade at PKR 302.9482 per USD, compared to the previous session's closing of PKR 304.944 per USD.

The currency saw an intraday high (bid) of 303.1 and a low (ask) of 302.95.

In the open market, Exchange Companies quoted the dollar at 301 for buying and 305 for selling.

To note, in just the last four days, the local unit has gained a staggering 30 rupees or 9.97%, from PKR 331 to PKR 301 against USD.

Remarkably, this narrows the gap between the interbank and open market to a mere 0.57%.

During the week PKR appreciated by 2.52 rupees or 0.83% compared to the previous week's closing of 305.4669.

The local currency has appreciated because of the recent reforms introduced by the State Bank of Pakistan (SBP) in the exchange companies sector. The reforms aim to consolidate and transform various types of exchange companies into a single category with a well-defined mandate and higher capital requirements.

The reforms also encourage leading banks to establish wholly owned exchange companies to cater to the legitimate foreign exchange needs of the general public.

Moreover, the ongoing crackdown against speculators, hoarders, and smugglers has also boosted the sentiment. Consequently, the gap between the open market and interbank has fallen significantly below the IMF’s suggested level of 1.25%.

Besides the official Kerb market, the black market for Hawala/Hundi is also experiencing a significant decline in dollar rates.

Previously, the rising demand for dollars due to speculation and smuggling had continually widened the gap between open market and interbank rates, causing significant concern.

On September 04, 2023, the gap surged to Rs25.36 per USD or 8.3%, far exceeding the IMF's recommended threshold.

It is safe to say that the government's initiatives are effectively yielding results in curbing speculative activities in the open market without requiring any intervention on the interbank side.

The situation could further improve if the government takes similar initiatives against gold smuggling, as individuals who cannot purchase dollars may now opt to invest their money in smuggled gold.

In comparison to major currencies, PKR gained 2.18 rupees against the Euro, closing at 324.4878 compared to the previous value of 326.6712.

The British Pound became cheaper by 1.7 rupees closing at 378.5034 compared to 380.2042 from a day ago.

The Swiss franc saw losses of 1.88 rupees, closing at 340.0474 compared to 341.9229 from the previous session.

Against the Japanese Yen, PKR gained 1.37 paisa, closing at 2.0552 versus 2.0689 a day ago.

The Chinese Yuan lost 39.03 paisa, closing at 41.2303 against 41.6206 from the previous session.

The Saudi Riyal decreased in value by 54.0 paisa from 83.022 a day ago to 82.482.

The U.A.E Dirham closed at 80.7689 with a loss of 53.21 Paisa from its values of 81.301 a day ago.

During the current financial year, PKR has depreciated against the Dollar by 16.96 Rupees or 5.6%. While the current calendar year has seen PKR depreciate by 76.52 Rupees or 25.26%.

In the Money Market, the benchmark 6 Month Karachi Interbank Bid and Offer rates inched up by 5 bps to 24.42 and 24.67%.

Furthermore, The State Bank of Pakistan (SBP) conducted an OMO in which it injected Rs.1,419.1 billion for 7 and 77 days.

The SBP also injected Rs.5.5 billion at 22.32% for 77 days in a Shariah Compliant Modarabah based OMO.

Performance Summary

52 Week Performance

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Posted on:2023-09-08T15:04:49+05:00

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