The Pakistani rupee (PKR) crashed beyond its lowest ever against the US Dollar during intraday trade today as uncertainty over a critical bailout from the International Monetary Fund (IMF) and Moody’s latest downgrade spoiled exchange rate fundamentals.
The Pakistani rupee fell during the first 2 hours of intraday trade today with the interbank rate losing Rs. 12 to fall as low as 278 by 11 AM. By 11:25 AM, it had lost Rs. 19 to crash at 285.
Open market rates across multiple currency counters registered highs of 288-290 after initial asks for the greenback opened at 277. Money changers have paused dollar outflow for now, a trader told ProPakistani briefly today.
Commenting on the whopping decline of the PKR, Topline Securities CEO Muhammad Sohail said the delay in IMF funding is creating uncertainty in the currency market.
The Pakistani rupee (PKR) fell by almost 7 percent against the dollar during intraday trade on Thursday, dropping as low as 285 against the greenback as the impact of Moody’s latest junk classification of Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa3 from Caa1.
In the open market, the domestic currency has dived by around 6 percent to a record low of 290 per US dollar compared with last week’s lows of 271-274 per US dollar. The rupee has fallen by 9.2 percent since Monday last week.
Independent analyst A H H Soomro said, “I think they’re aiming to increase SBP reserves and honoring pending import payments. Hence the cap- control could have been lifted to a market-determined exchange rate”.
The rupee is down almost Rs. 52 since its record-breaking single-day drop of Rs. 25 in the last week of January and has since then gradually parried small losses despite economic pressure. As per exchange rate movements witnessed today, the PKR has lost Rs. 19 today, its worst plunge since the all-time low drop of Rs. 24.54 in January.
The local unit will likely depreciate significantly as part of the impact of the IMF taxes, import issues, and credit rating downgrades. Given the free-float model, no one can predict how low the currency may fall.
This is an intraday market update.
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