The Pakistani rupee (PKR) reversed gains against the dollar during interbank trade on Tuesday, initially dropping as low as 276.975 against the greenback before parrying back as policy-level talks with the International Monetary Fund (IMF) start today.
At close, the rupee depreciated by 0.35 percent and suspended movement at 276.28 after losing 98 paisas against the greenback.
The local unit was largely bearish against the greenback and opened trade at 274.80. in the open market. By midday, the greenback moved higher against the rupee to as high as 276. After 1 PM, the local unit moved lower against the top foreign currency before the interbank close.
The rupee is down over Rs. 46 since its record-breaking single-day drop of Rs. 25 in the last week of January after the currency was finally ‘freed’ against the US dollar in the inter-bank market. As per market trends and fiscal developments observed today, the PKR has managed to lose almost Rs. 1 today.
Money changers are of the view the local unit is bearing the cost of a gravely mishandled exchange rate and dollar smuggling via the Afghan transit trade. Monday’s gains were a brief kickback for re-organizing fundamentals as chances are the PKR could experience gradual, but irregular, upticks if the IMF agrees to release funds for Pakistan soon. In any case, the PKR could depreciate to 300 due to no long-term policy shifts to revive the economy. Given the free-float model, no one can predict how low the currency may fall, but the much-feared 300-level is just another record-breaking slump away.
Technical talks between Pakistan and the IMF team are said to have ended on Monday, with policy-level talks beginning today as both sides enter a crucial part of discussions to unlock over $1.1 billion for the cash-strapped South Asian economy. Unless the funds are released in March, the rupee outlook remains chaotically uncertain.
The PKR was bearish against most of the other major currencies in the interbank market today. It lost seven paisas against the Pound Sterling (GBP), 26 paisas against the UAE Dirham (AED), 27 paisas against the Saudi Riyal (SAR), 39 paisas against the Canadian Dollar (CAD), and 71 paisas against the Australian Dollar (AUD).
Conversely, it gained 54 paisas against the Euro (EUR) in today’s interbank currency market.
GIPHY App Key not set. Please check settings