After going through stable and uncertain sessions, the Pakistani Rupee (PKR) may remain volatile against the US Dollar for next week starting from May 22, 2023.
The local currency demonstrated a mix of stability and volatility against the US dollar throughout the week. While the currency experienced brief periods of appreciation, it ultimately faced depreciation due to increased demand for the dollar and concerns surrounding the ongoing International Monetary Fund (IMF) program. The week began with signs of improvement as the rupee gained ground, but it later faced challenges, resulting in a decline in value.
The currency experts attribute these fluctuations to political tensions, import demands, and the ongoing IMF program.
PKR on May 15, 2023, showed signs of stability as it gained 11 paisas to close at PKR 284.97 against the US dollar. This improvement was attributed to easing political tensions and a positive response from the IMF. The rupee rebounded strongly after reaching its lowest level on May 11, 2023.
The PKR ended firmer against the US dollar on May 16, 2023, with an exchange rate of PKR 284.96 compared to the previous day’s closing rate of PKR 284.97. The appreciation of the rupee was mainly due to the easing of political tensions in the country and the positive response from the IMF. This stability followed a week of high volatility.
READ MORE: State Bank highlights economic challenges for Pakistan
However, on May 17, 2023, the PKR experienced a decline against the US dollar, closing at PKR 285.40. This depreciation amounted to a decrease of 44 paisas compared to the previous rate. Increased demand for the dollar in relation to import and corporate payments, along with concerns about the ongoing IMF program, contributed to this weakening.
The PKR witnessed a further decline of 22 paisas against the US dollar on May 18, 2023, closing at PKR 285.62. The heightened demand for the dollar and concerns surrounding the IMF program continued to put pressure on the local currency.
Continuing its downward trend, the PKR faced further depreciation against the US dollar, falling by 20 paisas on May 19, 2023. This decline was driven by a scarcity of inflows, resulting in a decrease in foreign exchange reserves. The exchange rate closed at PKR 285.82 to the dollar.
Throughout the week, the Pakistani Rupee demonstrated both resilience and vulnerability against the US dollar. Despite signs of stability earlier in the week, concerns surrounding the IMF program and increased demand for the dollar ultimately weighed on the currency’s value.
READ MORE: SBP issues procedure for payment of mark-up subsidy under youth program