PKR gains Rs6.63 against dollar as volatility in currency market persists
KARACHI: The Pakistani rupee on Friday reversed losing trajectory as the local currency gained 2.38% against the US dollar, after dropping 6.7% the previous day.
As per the State Bank of Pakistan (SBP), the rupee settled at 278.46 against the greenback, an increase of Rs6.63 in the interbank market.
Interbank closing #ExchangeRate for todayhttps://t.co/6cNkqlH1bE pic.twitter.com/ThBJpzAyfX
— SBP (@StateBank_Pak) March 3, 2023
Following a sharp decline of roughly Rs19 to a new historic low of 285.09 versus the US dollar on Thursday, the Pakistani rupee has now begun to recover.
In a significant development, the Monetary Policy Committee (MPC) of the State Bank of Pakistan lifted the key policy rate by 300 basis points (bps) to 20% on Thursday with the goal of containing inflation.
In order to relieve pressure on the external account and meet import demands, the committee further emphasized the urgent necessity for energy saving measures.
The MPC believed that this decision will help to anchor inflation expectations and steer it to a medium-term target of 5%-7% by end-FY25.
Meanwhile, Moody’s Investors Service on Friday downgraded the long-term deposit ratings of five Pakistani banks to Caa3 from Caa1. The banks are Allied Bank Limited (ABL), Habib Bank Limited (HBL), MCB Bank Limited (MCB), National Bank of Pakistan (NBP) and United Bank Limited (UBL).
Moreover, Moody’s also downgraded the five banks’ long-term foreign currency Counterparty Risk Ratings (CRRs) to Caa3 from Caa1.