USD vs PKR – Pakistani Rupee Losing Ground
Open trading on Monday caused the Pakistani rupee to fall in value against the US dollar. This fall comes before the expected signing of a bailout agreement with the International Monetary Fund. It is expected that the USD vs PKR will continue to widen the gap after this agreement is signed. In a statement regarding the bailout agreement the IMF spoke regarding a “market determined exchange rate,” according to Dawn. This statement was not accepted well by investors, although there has been no sign of panic yet regarding the issue of the US dollar vs Pakistani rupee and the current dollar rate.
Forex Markets Rife With Speculation
Investors in the Forex markets are speculating about what could happen with the USD vs PKR issue, but time will be the only ‘revealer’ of fact. Currency dealers claimed the dollar rate on Monday was Rs143.70. However, Karachi recorded the US dollar vs Pakistani rupee trade value to be closer to Rs144.50. Other cities, such as Islamabad, had higher rates than Karachi. So, it seems the Forex markets are more speculation than fact at the moment.
Banks Unable To Cross The Line
In spite of the fact that the potential for the USD vs PKR to yield a higher trade rate, Pakistani bankers say they are limited in what they can do in regards to exchange. “We are not allowed to cross the Rs141.50 line, though the potential for higher rate of dollar is visible,” one banker said. The US dollar vs Pakistani rupee battle has caught the attention of investors and officials of various governments. Pakistan’s own Zafar Paracha said “Fears of further devaluation as a result of the agreement with the IMF have depressed the currency market and the rupee may lose more against the greenback in the coming days.” Paracha serves as Secretary General of Exchange Companies Association of Pakistan.
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Bailout Terms Still Secret
The actual terms of the bailout agreement reached with the IMF are still not public information. This is helping fuel the uncertainty surrounding the USD vs PKR situation, and investors are worried that it could have a severe impact on the dollar rate. If the agreement does affect the US dollar vs Pakistani rupee debacle, it will almost certainly be in a negative way for the Pakistani currency.
Foreign Investment Inflow Below Normal Trends
According to the President of the Forex Association of Pakistan, Malik Bostan,“I believe foreign exchange inflows have increased by estimated five per cent due to Ramazan.” This is far below the normal inflow increases of 15-20% that usually occur during Ramazan. This is an indicator that the USD vs PKR is having an impact on the local economy. Bostan also said,“the dollar may gain more against rupee if the rate in the inter-bank market is changed upward. The market was expecting a change on Monday but it was good that the inter-bank rates remained unchanged.” The dollar rate is being closely watched by those following the US dollar vs Pakistani rupee, and once the bailout agreement actually goes into effect we will know more.