The Pakistani rupee showed a slight recovery from its 3-day decline against the US Dollar today, opening at 289 in the interbank market.
By 12 PM, it demonstrated a positive trend, reaching as high as 288, with an increase of around Rs. 6 against the dollar.
However, it later declined to 294 between 1:30 PM and 2:30 PM and remained stable at that level.
The open market rates for various currencies ranged between 298 and 302.
At the end of the day, the PKR experienced a minor 0.01 percent appreciation, closing at 294.93 after gaining two paisas against the dollar.
Currently, US Dollars are priced at higher premiums in the open market, and their expansion is anticipated throughout the financial year 2023-24. Today’s recovery is considered a preliminary indication of potential further drops in the upcoming days, as non-banking channels continue to stay above the 300 mark.
Since July, trends have predominantly shown a downward trajectory after the approval of a new $3 billion bailout deal for Pakistan by the International Monetary Fund. While the PKR initially surged to 275.4, notable analysts at that time predicted a rise to 250. However, the US Dollar interbank rate has increased by around Rs. 20 (equating to a nearly 7 percent drop in PKR value).The State Bank of Pakistan will announce its monetary policy on Monday
The black market rate has also distanced itself from the official bank rate, trading within the 308-312 range. Currency dealers noted a negative sentiment in the market today, predicting a further drop in the rupee’s value. They anticipate a peak drop after the next update on the country’s annual inflation rate.
Significantly, the rupee has declined by almost Rs. 75 since January 2023. Since April 2022, it has depreciated by over Rs. 122 against the US dollar. Considering the exchange rate fluctuations observed today, the PKR saw a mere gain of two paisas against the dollar.
In another context, Pakistan’s federal government’s total public debt stock has surged by 27.3 percent year-on-year in June 2023, compared to the same period last year. The State Bank of Pakistan (SBP) released monthly data indicating an increase from Rs. 47.784 trillion in June 2022 to Rs. 60.840 trillion in June 2023, reflecting a rise of Rs. 13.056 trillion.
Interestingly, the PKR displayed strength against major currencies in the interbank market today. It gained 57 paisas against the British Pound (GBP) and Rs. 2.26 against the Australian Dollar (AUD).