The Pakistani rupee gained further ground 6th day in a row against the US Dollar today after opening trade at 282 in the interbank market. At 11:30 PM, it was stable, rising as high as 282 after gaining ~Rs. 1 against the greenback during intraday trade. The interbank rate remained at 282 before anchoring trends at the 283 level for the remainder of the day. Open market rates across multiple currency counters stood in the 282-284 range today. At close, the PKR appreciated by 0.07 percent to close at 283.01 after gaining 20 paisas against the dollar today. The rupee closed in the green sixth day in a row today. On a calendar year-to-date basis, it has so far depreciated by 19.99 percent and appreciated by 1.05 percent on a fiscal YTD basis. Overall, the rupee is down nearly Rs. 65 since January 2023. Since April 2022, it is down over Rs. 112 against the greenback. As per exchange rate movements seen today, the PKR has gained 20 paisas against the dollar. Notably, the World Bank has projected a drop in remittance flows to Pakistan to $24 billion in 2023 and a further drop below $22 billion with a 10 percent decline in 2024, saying the growing economic turmoil sparked by a balance of payment crisis and high debt has led to a worsening loss of public confidence reflected in a diversion of remittances from formal to informal channels. WB said the rupee depreciated sharply between early 2022 and early 2023, and the government’s attempts to limit capital outflows through import and capital controls diverted remittance inflows from formal channels, contributing to shortages of foreign currency. Depreciation and exchange rate management policies have led migrants in Bangladesh, Pakistan, and Sri Lanka to take advantage of the black-market premia and transfer funds through informal and formal channels. In response to a query centered on the WB forecast for the PKR, traders told ProPakistani that a drop in remittances can only hurt the interbank economy and may occur at the expense of Hawala networks resurging in the event of fiscal indiscipline. ‘Remittance could also fall with further rupee devaluation. This way if an expat is remitting Rs. 100,000 at a rate of 283/$ today and the PKR depreciates to 300/$ in March 2024, they will send $333 then instead of $354 today. That’s a $20 hit, and we get thousands of pay orders daily,’ they added.
Source: Pro Pakistani