Pakistan’s rupee remained stable against the US dollar, appreciating a marginal 0.01% in the inter-bank market on Tuesday.
As per the State Bank of Pakistan (SBP), the PKR closed at 177.88 against the USD after a day-on-day appreciation of one paisa or 0.01%. On Monday, PKR closed at a record low of 177.89 against the USD.
The rupee has depreciated 11.28% CYTD and 12.9% on FYTD basis against US dollar.
Meanwhile, the Monetary Policy Committee (MPC) of the central bank is expected to meet today (Tuesday) to review economic indicators and take a decision on the key policy rate.
In the previous monetary policy meeting held on Nov 19, 2021, the committee decided to raise the policy rate by 150 basis points to 8.75% to address risks related to inflation and the balance of payments.
Against USD: Pakistan’s rupee hits new low, nears 178
“The money market is expecting a policy rate hike to the tune of 100-125 basis points,” an analyst said, while talking to Business Recorder.
The analyst was of the view that the PKR is undervalued owing to the REER value, which remains at 94-95, “therefore, it should be at 169-170.”
The expert also added that the latest remittance figures has added to the positivity in the exchange rate. “However, the inflation rate would continue to bite and is expected to hit 13% in January owing to price adjustments in electricity, gas and fuel rates.”
Jul-Nov remittances post 10pc growth YoY
Inflows of remittances witnessed a month-on-month decline of 6.5% in November 2021. The country received $2.352 billion of inflows during November 2021 against $2.517 billion in October 2021, a decline of $166 million. On a yearly basis, remittances increased by 0.6% in November 2021. Cumulatively in the five months of the ongoing fiscal year, remittances were up 10%.
Source: Business Recorder
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