KARACHI: The Pakistani rupee lost further ground against the US Dollar during intraday trade today after opening trade at 287.1 in the interbank market.
At 12 PM, it was bearish, falling as low as 290 after losing ~Rs. 2 against the greenback.
Later, it charged up to the 289 level between 12:30 PM and 1:15 PM and stayed at that level.
Open market rates (documented) across multiple currency counters stayed in the 294-298 range. At close, the PKR depreciated by 0.64 percent to close at 289.38 after losing Rs. 1.84 against the dollar today. The informal exchange rate initially docked at 299-302.
Wednesday’s cash rate per dollar in Hundi clocked in at the 300-304 band while many channels (undocumented) reported rates as high as 306.
Wednesday’s losses came with domestic import restrictions uplifting greenback demand while the government prepares to move out by August 12.
A trader said today’s losses are in tandem with July’s expectations of big drops below 290 to levels beyond 300 as money markets discover new levels to form resistance. Sentiments and economic indicators continue to play a big role in determining rates and today’s drop shows low confidence in PKR’s ability to hold the ship on expectations of cuts in dollar value after Fitch downgraded US credit rating.
“In our view, there has been a steady deterioration in standards of economic policies over the past 14 months, including on fiscal and debt matters. Post-flood aftershocks and the abrupt regime change in spring last year continue to have adverse affect on the exchange rate,” one of them said via SMS.
Overall, the rupee is down nearly Rs. 65 since January 2023. Since April 2022, it is down over Rs. 113 against the greenback. As per the exchange rate movements witnessed today, the PKR has lost Rs. 1.84 against the dollar today.
Rating agency Fitch on Tuesday downgraded the US government’s top credit rating, a move that drew an angry response from the White House and surprised investors. International traders’ immediate response was to embark on a safe-haven push out of stocks and into government bonds and the dollar. Fitch downgraded the United States to AA+ from AAA, citing fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations that threaten the government’s ability to pay its bills. –Agencies
