Currency reserves fall by $1.07 billion in a week

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April 7, 2022 (MLN): The falling Pakistani rupee (PKR) maintained its losing streak and witnessed a massive two-rupee drop on Thursday in the interbank market as the currency closed trading at 188.18 against the dollar , compared to the previous close of PKR186.13 per USD.

During a gloomy session, PKR traded in a range of rupees 2.85 per USD, with an intraday high bid of 189 and an intraday low bid of 186.45.

Speaking to Mettis Global, Zafar Paracha, president of the Exchange Companies Association of Pakistan (ECAP), stressed that imports of luxury items should be banned at the earliest as the local unit is in free fall.

In this deteriorating economic scenario and political turmoil, authorities must declare an economic emergency in the country and take conscious steps to address the wave of prevailing uncertainties, he stressed.

Meanwhile, Ali Khizar, an independent economist, believes: “Everyone is looking for buyers – importers buy dollars and exporters hold onto. Everyone is trying to buy.”

“There is no government. There is no confidence,” he added.

He also underlined the need for the IMF program and an increase in oil prices to deal with the ongoing crisis.

At the same time, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) has raised its key rate by 250 basis points, taking into account the challenges facing the economy.

“This strong and proactive policy response was necessary due to the deterioration in the inflation outlook and the increase in risks to external stability since the last meeting,” SBP said in a statement.

From July 21 to date, the local unit has lost Rs30.63 against the USD. Similarly, the rupee fell 11.66 rupees in CYTD, with the month-to-date (MTD) position showing a 2.50% decline, according to data collected by Mettis Global.

Over the past 52 weeks, PKR has lost 19.08% against the greenback, hitting its low of 188.17 today and hitting its high of 152.27 on May 7, 2021.

In addition, the local unit has weakened by 11.49% since its high on April 08, 2021 against EUR, while it is down 14.97% against GBP since its high on April 9, 2021.

In addition, the PKR’s performance over the month has so far remained dismal against the major currencies as it fell 2.52%, 2.50%, 2.24%, 2.23%, 1, 56%, 0.64% and 0.18% against SAR, AED, GBP, CNY, CHF, JPY and EUR, respectively.

Within the open market, PKR traded at 189/191 per USD.

Meanwhile, the currency lost 3.3 rupees against the British pound as the day’s closing rate was PKR 246.55 per GBP, while the previous session ended at PKR 243.23 per GBP.

Similarly, the value of PKR weakened 2.3 rupees against EUR, which closed today at PKR 205.11 in the interbank market.

On the other hand, within the money market, the overnight repo rate was 10.00/10.25 percent by the end of the session, while the 1-week rate was 10.05/10.15 percent.

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