July 19, 2022 (MLN): The miserable Pakistani rupee (PKR) spent another day in a bottomless pit wherein it witnessed a massive slash of depreciation as the currency closes the day’s trade at PKR 222 per US dollar, losing 6.8 rupees compared to the previous close of PKR 215.20 per USD.
The rupee endured a volatile trading session with quotes being recorded in a range of 8.6 rupees per USD showing an intraday high bid of 224 and an intraday low offer of 216.40 while in the open market, PKR was traded at 213/216 per USD while, in the open market, PKR was traded at 222/224 per USD.
Experts are of the view that amidst the global recession, the dollar is being considered a safe haven thus the demand for the dollar is rising sky high against almost all the major currencies. PKR is no exception.
However, the political uncertainty on the local front has added more fuel to the fire which pushes demand for dollars in the interbank market and stimulated the element of speculation.
Zafar Paracha, President of Exchange Companies Association of Pakistan (ECAP) told Mettis Global, “No significant measure by the government to halt the freefall of PKR indicates that currency depreciation may be a part of IMF agreement and if the situation remains the same, PKR will continue to move downwards in days to come.”
He said that under the present macros wherein the price of oil in the international market is dropping, PKR should not be more than 190 per USD.
In order to arrest the freefall of PKR, he suggested that government should curtail its unnecessary expenditures to prevent the country from further debts otherwise, the country would face a deteriorating situation of law and order.
In CYTD, the local unit plummeted by Rs45.47 or 20.49% against the USD while it registered a decline of 7.72% against the greenback in MTD, as per data compiled by Mettis Global.
During the last 52 weeks, PKR lost 27.37% against the greenback while reaching its lowest at 221.99 on July 19, 2022, and the highest of 161.22 on July 26, 2021.
Furthermore, the local unit has weakened by 16.45% and 16.77% against EUR and GBP, respectively since its high on July 19, 2021.
Along with the US dollar, the performance of the local unit remained bleak against other major currencies in today's sessions as the currency lost 9.4 rupees or 3.53% to the Pound Sterling as the day's closing quote stood at PKR 266.64 per GBP, while the previous session closed at PKR 257.25 per GBP.
Similarly, PKR's value weakened by 9 rupees or 3.98% against EUR which closed at PKR 227.27 at the interbank today.
Meanwhile, it has depreciated by 3.52%, 3.24%, 3.08%, 3.07% and 3.06% against CHF, JPY, CNY, AED and SAR, respectively.
On another note, within the money market, the State Bank of Pakistan (SBP) conducted an Open Market Operation (OMO) in which it mopped up Rs321.5 billion from the money market for 3 days at 14.9%.
The overnight repo rate towards the close of the session was 14.75/15.10%, whereas the 1-week rate was 14.55/14.65%.
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