The Pakistani Rupee (PKR) depreciated by 12.89 paisa against the US Dollar during Monday’s interbank session, with the currency closing at PKR 278.63 per USD, down from the previous session’s close of PKR 278.5 per USD. The PKR exchange rate fluctuated throughout the day, reaching an intraday high (bid) of 278.80 and a low (ask) of 278.60.
This decline adds to the PKR’s ongoing weakness, which saw a loss of over 16 paisa against the USD last week. In the open market, the dollar was quoted at 279.21 for buying and 280.41 for selling, reflecting the continuing pressure on the PKR exchange rate.
PKR Performance Against Major Currencies
The PKR exchange rate also weakened significantly against other major currencies. The local currency lost 4.67 rupees against the Euro, closing at 305.49 compared to the previous value of 300.82. The Swiss Franc surged by 8.04 rupees, with the PKR exchange rate closing at 327.63 compared to 319.58 in the previous session.
The PKR also depreciated heavily against the Japanese Yen, plunging by 7.92 paisa to close at 1.9469 versus 1.8677 a day earlier. The Yen’s strength has been driven by a broad selloff in financial markets amid fears of a U.S. recession, pushing investors toward safe-haven assets like the Japanese Yen and Swiss Franc. This appreciation of the Yen could have significant implications for Pakistan’s automotive sector, as car prices may rise due to the higher import costs.
Impact of Global Economic Uncertainty
Most financial markets started the week on a weak note due to growing concerns about a deeper U.S. economic slowdown and escalating tensions in the Middle East. These factors have prompted investors to seek safer assets, further pressuring the PKR exchange rate.
The British Pound also became more expensive against the PKR, rising by 2.84 rupees to close at 356.97 compared to 354.13 from a day ago. Similarly, the Chinese Yuan gained 42.64 paisa, closing at 39.02 against 38.6 from the previous session. The Saudi Riyal and U.A.E Dirham also appreciated slightly, with the PKR exchange rate closing at 74.22 and 75.83, respectively.
Year-to-Date Performance and Market Outlook
During the current financial year, the PKR has depreciated by 28.77 paisa or 0.1% against the Dollar, while the current calendar year has seen the PKR appreciate by 3.23 rupees or 1.16%. However, the recent trend suggests continued volatility in the PKR exchange rate, influenced by both domestic and global economic conditions.
In the money market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched down by 2 basis points to 19.1% and 19.35%, respectively. The performance of these rates and the PKR exchange rate will be closely watched by investors and policymakers as they navigate the challenges posed by global economic uncertainties.
