During intraday trading, the Pakistani rupee (PKR) rises on both the open market and the interbank.
KARACHI: After the Finance Ministry and State Bank of Pakistan (SBP) laid out the road map for navigating the nation’s economy during the current fiscal year, the rupee appreciated in the interbank and open market during intraday trade.
The local currency increased by 4.50 in the open market and decreased to 243.50 per dollar. The rupee was trading at 239.25 against the dollar, up only Rs0.12 on the interbank market.
The gain on the open market also followed the state bank’s last Friday open market operation, which saw it inject Rs 1,240.75 billion into the money market for 63 days.
The local currency, which is currently among the worst performing ones globally, suffered significant losses in the interbank and open markets in July. The rupee has lost about 60 rupees in value over the past four months.
In a joint statement, the central bank and the finance ministry provided assurances that the nation’s issues were transient and were being aggressively addressed.
According to the statement, all previous steps for the International Monetary Fund’s (IMF) review had been finished, and the Executive Board meeting for the $1.2 billion loan release was scheduled for a few weeks.
It also noted that macroeconomic policies, including fiscal and monetary policy, had been appropriately tightened to lessen pressures brought on by demand and control the current account deficit, which is a significant challenge for the government.
The rupee has temporarily overshot, according to the SBP and Finance Ministry, but over the coming months, it is anticipated to appreciate in line with fundamentals.
According to them, the global surge in the US dollar since December 2021, which followed the Federal Reserve’s historic tightening and increased risk aversion, is responsible for about half of the rupee’s depreciation. They also noted that market sentiment has been a significant factor in this regard.
The statement stated that this uncertainty is being resolved, adding that “this sentiment-driven component of the Rupee depreciation will also unwind over the coming period.