PKR INTERBANK TRADING SNAPSHOT:

In Wednesday’s interbank trading, the Pakistani rupee (PKR) exhibited a marginal decrease of 14 paisas against the US dollar, settling at PKR 280.1 compared to the previous day’s rate of PKR 280.25.

OPEN MARKET RATES:

Exchange Companies set the buying rate for the dollar at 279.5 and the selling rate at 281.5. In contrast, the rates a day earlier stood at 281 for buying and 283.5 for selling.

POSITIVE ECONOMIC INDICATORS AND STABLE CURRENCY MARK NOTEWORTHY DEVELOPMENTS:

Pakistan recently received the second instalment of SDR 528 million as reported by SBP today, equivalent to $705.6 million, from the International Monetary Fund (IMF). Coupled with encouraging economic data, this influx of funds signifies positive strides in the nation’s financial landscape.

STRENGTHENING ECONOMIC FUNDAMENTALS:

Recent economic data released by the central bank indicates favorable indicators:

  • The PKR’s Real Effective Exchange Rate Index (REER) rose by 0.6% MoM in December 2023, reaching a provisional value of 98.86.
  • A significant current account surplus of $397 million was recorded, driven by decreased imports and increased exports.
  • Foreign investments surged to $243 million in December, marking a 56% increase from the previous month and reaching the highest level in a year.

STABLE CURRENCY AND FOREIGN EXCHANGE MARKET:

The Pakistani Rupee has demonstrated stability and gained ground against major currencies:

  • Against the Euro, PKR gained 1.48 rupees, closing at 304.44.
  • The British Pound became cheaper by 55.14 paisa, closing at 354.51.
  • Swiss franc saw losses of 1.46 rupees, closing at 324.77.
  • PKR gained 2.41 paisa against the Japanese Yen, closing at 1.894.
  • Chinese Yuan lost 9.48 paisa, closing at 38.92.
  • Other currency movements include the Saudi Riyal, U.A.E Dirham, and appreciation against the Dollar.

TECHNICAL CHART ANALYSIS: NAVIGATING KEY FIBONACCI LEVELS AND SUPPORT CHALLENGES OF PKR

FISCAL YEAR AND CALENDAR YEAR PERFORMANCE:

In the current financial year, PKR has appreciated against the Dollar by 5.89 rupees or 2.1%. In the current calendar year, it has appreciated by 1.76 rupees or 0.63%.

MONEY MARKET TRENDS:

In the money market, the benchmark 6-month Karachi Interbank Bid and Offer rates slightly decreased by 4 bps to 20.48 and 20.73%. The State Bank of Pakistan (SBP) conducted a fixed-rate Pakistan Investment Bonds (PIBs) auction, witnessing a decline of up to 50 bps in yields.

ANTICIPATING POLICY CHANGES:

The declining yields suggest market expectations of a potential decrease in interest rates in the coming months.

However, the IMF has cautioned that while economic activity has stabilized, the outlook remains challenging and depends on the effective implementation of sound policies.In summary, positive economic indicators, stable currency performance, and favorable market trends position Pakistan’s economic environment as resilient, fostering optimism for continued growth and stability.

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