Rupe Bloodbath results in the largest one-day loss to the US dollar in more than a year

 Rupe Bloodbath results in the largest one-day loss to the US dollar in more than a year

The Pakistan Rupee (PKR) continued its record decline against the US dollar (USD) and today reported losses on the interbank market. The local currency lost Rs. 2.09 against the dollar at the end of today's meeting. This is the largest loss of one day reported in local currency in more than a year.

Against the USD fell 1.09 percent and closed at Rs. 188.18 today after losing 89 paisas and closing at Rs. 186.13 on the interbank market on Wednesday, April 6 The domestic currency reached an intraday low of Rs. $ 189.00 during today's open auction. So far, PKR has lost Rs. 11.67 against the USD in the calendar year 2022. Based on the fiscal year to date (FYTD), the local unit decreased by 19.45 percent or Rs. exchanged for $ 30.63.

Economic Analyst, A.H.H. Soomro, said ProPakistani,

There is a free fall in the money market. A serious form of uncertainty has taken over the country. There is no assets and we are concerned about the growing political turmoil in the country and the poor world commodity prices. The Supreme Court ruling will increase the volume. There was a battle of the Titans and the killing of ants. Businesses, the masses and the government are all sick. It's as bad as it can be.

He added that the current situation "requires an urgent escalation of the SBP, a notification of a secure government or a continuation of the vote of no confidence in the NA." Whatever is needed is NOW ".

Pakistan's bond and money markets are under strong pressure amid growing political uncertainty in the country. Economic and political uncertainty has risen sharply since Prime Minister Imran Khan picked up a National Assembly (NA) meeting on Sunday.

The political upheaval continued when the Deputy Speaker of the Punjab Assembly was not allowed to cast his vote for the Punjabi Chief Minister. The case is currently before the Supreme Court and is awaiting publication soon. On the other hand, market statistics show that 6M Kibor is at a two-year high of 13.19 percent since such charges were last recorded in March 2020. 6M Kibor has also risen by 200 basis points since then. March 8, 2022, when No. -Proposal of Trust submitted to the NA by the opposition parties. Similarly, 3-year and 5-year bonds are also 12.7 percent and 12.5 percent on almost 2.5-year sides. Since March 8, 2022, yields have increased by about 130 basis points. Like the bond market, the currency market was under strong pressure, as the dollar recently outperformed the very high value of Rs 189 on the interbank market, an increase of 6 percent since the transfer of distrust.

The weakening of the currency, along with declining foreign exchange reserves, fell to $ 12 billion on March 25, 2022, from a peak of $ 20 billion on August 27, 2021. The growing current account deficit added significant pressure on foreign exchange reserves. As a result, the import coverage of 3 months of imports in August 2021 was reduced to two months.

Yields on Pakistani Eurobonds are also rising, with bond yields reaching 17.3 percent in 2024, compared with 5 percent in December 2021 with a growing risk of default. Likewise, the 2025 bond also rose from 5.72 percent in December 2021 to 15.99 percent.

Market participants suggest that clear political and IMF relations will remain key to Pakistan's economic, monetary and bond prospects. Changes in rates and rising oil prices will also be important to sustain. In contrast, the interbank currency market today gained 27 points against the Australian dollar (AUD).