PKR Drops 5 Paisa Against USD Amid Political Instability

The Pakistani rupee (PKR) depreciated by 4.72 paisa against the US dollar in Monday's interbank session as the currency settled the trade at PKR 279.33 per USD, compared to the previous session's closing of PKR 279.28 per USD.

In the open market, exchange companies quoted the dollar at 279.19 for buying and 281.19 for selling.

The financial markets are embracing the incoming government following last week's elections in the country.

However, the uncertainty arising from delays in election results has adversely impacted the financial markets.

The election outcome points to increased political instability, casting a darker shadow over growth and prospects for securing International Monetary Fund (IMF) aid the country needs to avoid default, said Bloomberg.

With no party winning a majority, and a strong performance by independents backed by Imran Khan (who is in jail and whose party was banned from running), the formation of a coalition government is likely to be challenging and chaotic, it added.

“The market needs clarity,” Bilal Khan, head of international sales at Karachi-based brokerage Arif Habib Ltd told Bloomberg.

“The election was on February 8 and we still don’t know who is forming the government,” he added.

In comparison to major currencies, PKR lost 77.72 paisa against the Euro, closing at 301.65 compared to the previous value of 300.87.

The British Pound became expensive by 85.57 paisa closing at 353.18 compared to 352.33 from a day ago.

The Swiss franc saw gains of 96.69 paisa, closing at 319.85 compared to 318.89 from the previous session.

Against the Japanese Yen, PKR lost 0.47 paisa, closing at 1.8742 versus 1.8695 a day ago.

The Chinese Yuan gained 0.66 paisa, closing at 38.83 against 38.82 from the previous session.

The Saudi Riyal closed at 74.49 with a gain of 1.46 paisa from its value of 74.47 a day ago.

The U.A.E Dirham increased in value by 1.39 paisa from 76.05 a day ago to 76.04.

During the current financial year, PKR has appreciated against the Dollar by 6.66 rupees or 2.39%. While the current calendar year has seen PKR appreciate by 2.53 rupees or 0.91%.

In the Money Market, the benchmark 6-month Karachi Interbank Bid and Offer rates inched up by 7 bps to 21.12% and 21.37%.