The Pakistani rupee (PKR) saw a depreciation of 15.73 paisa against the US dollar in Tuesday’s interbank session, with the currency settling at PKR 278.66 per USD compared to the previous session’s closing of PKR 278.5 per USD. During the trading session, the rupee experienced an intraday high (bid) of 278.85 and a low (ask) of 278.65. In the open market, exchange companies quoted the dollar at 278.5 for buying and 280.6 for selling.
In its latest research report, JPMorgan highlighted that despite Pakistan’s Balance of Payment (BoP) account being in a healthy position, there is anticipation of a weaker PKR in the near term due to the final clearance of dividend backlogs. The report stated, “In our estimates, we do not view PKR as being overly expensive.” Although the International Monetary Fund (IMF) has indicated that all foreign exchange restrictions have been removed, there are still a few informal restrictions related to the repatriation of dividends. If these restrictions are fully eliminated at the start of the Extended Fund Arrangement (EFF), it could result in USD/PKR moving moderately higher in the coming months.
Currency Performance
Against major currencies, the PKR’s performance varied:
• PKR gained 34.5 paisa against the Euro, closing at 301.58 compared to the previous value of 301.92.
• The British Pound became more expensive by 1.22 rupees, closing at 358.17 compared to 356.95 from the previous day.
• The Swiss franc saw a loss of 46.17 paisa, closing at 314.32 compared to 314.78 from the previous session.
• Against the Japanese Yen, PKR gained 1.18 paisa, closing at 1.7988 versus 1.8106 a day ago.
• The Chinese Yuan gained 3.97 paisa, closing at 38.42 against 38.38 from the previous session.
• The Saudi Riyal closed at 74.28, with a gain of 3.99 paisa from its previous value of 74.24.
• The U.A.E Dirham increased by 4.28 paisa, from 75.87 a day ago to 75.82.
During the current financial year, the PKR has depreciated against the Dollar by 31.61 paisa or 0.11%. However, in the current calendar year, the PKR has appreciated by 3.2 rupees or 1.15%.
Money Market Overview
In the money market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched up by 2 basis points to 19.15% and 19.4%, respectively. Additionally, the State Bank of Pakistan (SBP) further lowered its key policy rate by another 100 basis points to 19.5%, in line with market expectations.
