After going through very volatile sessions due to political unrest, the Pakistani Rupee (PKR) is likely to stay stable against the dollar during the next week starting May 15, 2023.
The Pakistani Rupee (PKR) remained highly volatile against the US Dollar throughout the week, with the exchange rate reaching a record low of Rs298.93 on May 11, 2023. The currency’s performance was heavily influenced by uncertain political conditions and concerns surrounding the IMF loan program.
The arrest of former Prime Minister Imran Khan by the National Accountability Bureau (NAB) and ongoing uncertainties related to IMF negotiations played a significant role in the instability of the PKR. These factors created confusion and panic in the market, leading to a decline in the value of the Rupee. Increased demand for the US Dollar also contributed to the depreciation of PKR against foreign currencies.
The trend of the Rupee’s value against the dollar followed a downward trend throughout the week, further exacerbating the impact of inflation and disappointing stakeholders. This volatility highlighted the complex interplay between economic, political, and market factors that influence currency values, making them highly susceptible to fluctuations.
On May 10, the PKR experienced a significant fall of Rs5.38, closing at Rs290.22 in the interbank foreign exchange market compared to Rs284.84 on May 9. This decrease in value was attributed to the arrest of former Prime Minister Imran Khan, which added to the uncertainties surrounding the currency’s performance.
READ MORE: Pakistani Rupee surges with historic single-day recovery of PKR 13.85 against dollar
On May 11, the Rupee hit a record low at Rs298.93, declining by Rs8.71 from the previous day’s closing of Rs290.22 in interbank foreign exchange market. The ongoing political unrest and uncertainties surrounding IMF negotiations continued to contribute to the instability of the PKR. The decline in the Rupee’s value on May 11 can be attributed to increased demand for the US Dollar as the market opened after the weekly holidays. Furthermore, uncertainties surrounding talks with the IMF also played a role in the depreciation.
The Rupee’s value experienced a marginal decrease on Tuesday declining by 99 paisas against the US dollar. This led to the currency closing at PKR 284.84 indicating a decrease from closing rate of PKR 283.85 on May 08, 2023.
On Wednesday the PKR’s value witnessed a significant rise, potentially due to the arrest of former Prime Minister Imran Khan on corruption charges. Political developments often have a notable impact on currency markets, and this event heightened uncertainty, putting additional pressure on the Pakistani Rupee.
On Thursday the local currency further weakened against the dollar and hit a record low at Rs298.93. The PKR declined by Rs8.71 from closing of Rs290.22 on May 10. The arrest of former Prime Minister Imran Khan continued to be a prominent factor impacting the currency’s performance.
READ MORE: PKR stages remarkable recovery, surging to 285 against dollar in early trading
The PKR saw a partial recovery on Friday. The local currency appreciated by Rs13.93 and closed at Rs285 as compared to previous day’s closing of Rs298.93 on May 11. The recovery of local currency is attributed to the Supreme Court of Pakistan’s order to release former Prime Minister Imran Khan. The court deemed his arrest by the NAB illegal, which alleviated some uncertainties and temporarily strengthened the Rupee.
PKR’s performance during the week was characterized by high volatility and a downward trend against the US Dollar. Uncertain political conditions, concerns surrounding the IMF loan program, increased demand for the US Dollar, and the arrest of former Prime Minister Imran Khan were key factors contributing to the currency’s instability.
READ MORE: Rupee witnesses bloodbath; hits record low of PKR 298.93 against dollar
