The Pakistani rupee reversed losses against the US Dollar and posted big gains today after opening trade at 279 in the interbank market.
At 11:30 PM, it was bearish, treading the 276 level against the greenback after losing ~Rs. 3.
Later, the interbank rate dropped to the 278 level between 1:30 PM and 2:30 PM before anchoring trends for the remainder of the day. Open market rates across multiple currency counters stood in the 277-280 range today.
At close, the PKR appreciated by 0.53 percent to close at 278.81 after gaining Rs. 1.48 against the dollar today.
The rupee rebounded from its 2-day losing streak today after massive investment news coming out of Beijing where the United Energy Group of China and Pakistan Refinery Limited on Wednesday signed a Memorandum of Understanding (MoU) for a $1.5 billion investment in the petroleum sector. While this didn’t play much into the recovery trend, traders said the forex market managed to cool off today but remains extremely volatile leading up to the IMF review in the coming few weeks.
The gap between interbank and open market rates is down by Rs. 61 since 4 September. The rates have gone down to as low as 277 and have since continued brief spikes to 280 today.
Pertinently, the rupee is down nearly Rs. 61 since January 2023. Since April 2022, it is down over Rs. 108 against the greenback. As per exchange rate movements witnessed today, the PKR has gained nearly Rs. 1.5 against the dollar.
The rupee’s long-term prospects remain uncertain, as Pakistan’s fundamental economic situation is precarious – the government is burdened by significant debt, while foreign reserves are under stress.