The Pakistani rupee fell sharply against the US Dollar today after opening trade at 295 in the interbank market.
At 12 PM, it was bearish, falling as low as 296.5 after losing ~Rs. 1.7 against the greenback.
Later, it went back to the 295 level between 1:30 PM and 2:30 PM and anchored trends for the remainder of the day.
Open market rates (documented) across multiple currency counters stood in the 299-304 range.
At close, the PKR depreciated by 0.29 percent to close at 295.78 after losing 86 paisas against the dollar today.
US Dollars are currently priced at extremely volatile premiums in the open market and are expected to expand further during the financial year 2023-24. Today’s drop was seen as a resumption of the PKR’s declining run against the greenback as it gradually slips towards 300.
Trends have remained largely red since July after the International Monetary Fund approved a new $3 billion bailout deal for Pakistan. Initially, the PKR rose as high as 275.4, with prominent analysts and Malik Bostan at the time tipping the local currency to rise above 250. However, the US Dollar interbank rate is up by ~Rs. 21 since then.
The black market rate has also moved further away from the Bank rate and trades in the 309-314 band. Meanwhile, currency dealers expect further slippage before August draws to a close in two weeks.
Pertinently, the rupee is down nearly Rs. 76 since January 2023. Since April 2022, it is down over Rs. 123 against the greenback. As per exchange rate movements witnessed today, the PKR has lost 86 paisas against the dollar.
Meanwhile, total foreign investment declined by 77 percent year-on-year (YoY) from $1.857 billion in FY22 to just $427.1 million in FY23.
Net foreign direct investment (FDI) in Pakistan declined by 24.8 percent YoY in the financial year 2022-23 to $1.456 billion, down from $1.936 billion in the same month last year.
Analysts suggest that investment inflows have been affected due to international and domestic economic and political unrest while more uncertainty over upcoming General Elections and the political landscape may aggravate projections for 2023-24.
Source: ProPakistani