The Pakistani rupee reported big gains against the US Dollar during intraday trade today after opening trade at 285.5 in the interbank market.
The Pakistani rupee was bullish in the first few hours with the interbank rate rising as high as 285 and staying on that level.
Open market rates across multiple currency counters gained over Rs. 27 to as high as 290.25 with further improvements expected before the day’s closing.
Dollar buying has halted almost everywhere as traders await larger impact before close today. This could affect/derail citizens preparing for Hajj season as many prefer paying in dollars for pilgrimage services.
Pertinently, the cash rate in the market on Wednesday averaged 315-317 before the State Bank of Pakistan’s (SBP) circular to commercial banks on credit card settlements.
The informal exchange rate has recovered massively and at 11:30 AM rose to the 290 level after SBP on Wednesday allowed banks to settle credit card payments at the interbank rate.
Today’s cash rate per dollar in Hundi is expected to fall below 310 when they start leaking data later today, while many suggest it could remain above 300 to as low as 305.
General Secretary Exchange Companies Association of Pakistan Zafar Paracha on Wednesday welcomed the SBP move which allowed the Authorized Dealers to purchase USD from the interbank for settlement of card-based transactions.
Paracha further said that in his opinion the SBP took the right decision at the right time, and it will lead to bringing down the open market USD rate up to Rs. 20-25.
As of 11:30 AM today, the PKR open cash rate has surged over Rs. 27 in under 3 hours.
One trader told that the interbank volume could feel some pressure at a fixed price of 285 as daily digital transactions average roughly above $3-5 million.
For now, cash counters have halted movement to avoid sellers’ pressure but reports on Hundi/Hawala exchange margins in the next couple of hours could change things.
Published in the Logical Baat, June 1,2023.