Rupee Loses Further Ground Against US Dollar 2nd Day in a Row

The Pakistani rupee slid against the US Dollar during intraday trade today after opening trade at 286 in the interbank market. At 12 PM, it was bullish, rising as high as 283 after gaining ~Rs. 3.8 against the greenback. Later, it dropped to the 287 level between 1:30 PM and 2:30 PM and stayed at that level. Open market rates (documented) across multiple currency counters rose to the 294-296 range. At close, the PKR depreciated by 0.17 percent to close at 287.91 after losing 48 paisas against the dollar today. The informal exchange rate initially docked at 298-302. Today’s cash rate per dollar in Hundi clocked in at the 299-304 band while many channels (undocumented) reported rates as high as 306. Traders on Tuesday expected markets to fall as sentiments over the possible spillover due to the former premier’s arrest steered trends today. Other markets fell again as well. The benchmark KSE-100 Index closed today’s session at 47,429, down by 956 points or ~2 percent compared to Monday. The index traded in a range of ~1,100 points, observing a high of 48,415 and a low of 47,335. Overall, the rupee is down nearly Rs. 65 since January 2023. Since April 2022, it is down over Rs. 115 against the greenback. As per the exchange rate movements witnessed today, the PKR has lost 48 paisas against the dollar today. In a key development, the Economic Coordination Committee (ECC) of the Cabinet on Monday evening approved the Finance Division’s proposal of changes in the contours of six incentives schemes of the State Bank of Pakistan to improve the inflow of remittances and to get optimal remittance inflow through formal channels. The meeting was told that the government has been operating six incentive schemes through SBP in order to attract home remittances and increase inflows. The PKR was red against most of the other major currencies in the interbank market today. It lost 12 paisas against the Saudi Riyal (SAR), 13 paisas against the UAE Dirham (AED), 14 paisas against the Euro (EUR), and 97 paisas against the British Pound (GBP). Conversely, it gained Rs. 1.25 against the Australian Dollar (AUD) and 37 paisas against the Canadian Dollar (CAD) in today’s interbank currency market.