PKR appreciates by Rs2.63 against greenback in interbank

KARACHI – After a lapse of several days the Pakistani rupee made a little come back on Tuesday, appreciating Rs2.63 against the US dollar in the interbank market.

The local currency was being traded at Rs263 against the dollar in the intra-day trade.

On Monday, the PKR had witnessed significant depreciation as well, settling at 269.63 after a fall of Rs7.03 or 2.61 per cent. This was its weakest inter-bank closing level in history.

Today s improvement comes after the International Monetary Fund (IMF) team has reached Islamabad led by director Nathan Porter.

— Fitch Solutions warns Pak rupee to weaken further —

The Pakistani rupee is expected to weaken further, particularly with Pakistan’s balance of payments positions likely to remain weak for several more months, Fitch Solutions predicted on Tuesday.

It warned that the rupee depreciation will have broader economic implications for the country which is already gripped by a major economic crisis, with the local unit plummeting, inflation soaring and energy in short supply.

In its quick view, the New York-based research agency noted that the rupee’s devaluation was triggered by the decision among local foreign exchange companies to remove the self-imposed cap on the exchange rate on January 25.

The State Bank of Pakistan (SBP) initially intervened, but the significant depreciation in the rupee “is a clear sign the authorities have effectively loosened their grip on the currency.”

Fitch Solutions mentioned that their current forecast for the rupee to reach Rs248 per dollar by year-end “is therefore now looking out of date”.