Pakistan rupee stable, dollar supply issues persist.

• Since the previous meeting of the MPC, analysts have estimated that the value of the Pakistan rupee has been stable between Rs218 and Rs224 per dollar.
• The volatility previously observed in interbank rates has transferred to open, black market prices.
• Despite low foreign exchange reserves, the supply-demand imbalance for the dollar continues.

Karachi: On Friday, the Pakistani rupee finished trading relatively flat about the US dollar. This was due to the continued demand from businesses for the US currency and the limited supply.

According to data from the State Bank of Pakistan, the currency's value decreased by Rs0.02, or 0.01%, to finish the day at 223.94 on the interbank market (SBP).

Since the latest meeting of the Monetary Policy Committee (MPC) on October 10, 2022, the currency's value has been trading in a range that extends between Rs218 to Rs224 for every dollar. This information comes from an AKD Research Report.

According to AKD experts quoted in the report, "however, the volatility that was previously evident in the interbank rates has transferred to the open and black markets, where margins have reached Rs8-10 on every dollar."

As investors waited for more information regarding the choice of the army chief, the Indian currency, the rupee, fell against the United States dollar on Thursday, losing 0.05% of its value on the interbank market.

While acknowledging that the MPC's decision reflects its opinion that inflationary pressures have proven to be more powerful and persistent than envisaged, the Monetary Policy Committee of the SBP increased the key policy rate by 100 basis points, bringing it up to 16%. The MPC also noted that the decision reflects the MPC's view that the rate should be increased.

The MPC phrased it this way: "This decision is aimed at ensuring that excessive inflation does not become entrenched and that risks to financial stability are managed," allowing for faster growth on a more sustainable basis. The goals of the decision include preventing persistently high inflation and minimizing threats to the economy's financial stability.

Dealers attributed the ongoing depreciation to more significant outflows and fewer inflows, and the pressure on the Pakistan rupee increased because of diminishing foreign exchange reserves.

When compared to the figure of $7.959 billion that was reported on November 11, the central bank's foreign currency reserves dropped to a total of $7.825 billion by November 18. This represents a decrease of $134 million.

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