The Pakistani rupee experienced a reversal of the gains it made against the US Dollar during intraday trade. It opened at 285.65 but was unable to sustain the recovery it had seen in the previous week. The interbank rate fell as low as 286 before bouncing back. In contrast, open market rates remained between 308 and 318.
The informal exchange rate, which had been trading above 310 throughout May and even reached as high as 320 due to the Hajj season and economic crisis, averaged around 310. By the end of the day, the Pakistani rupee depreciated by 0.09 percent, closing at 285.42 and losing 27 paisas.
Traders expressed disappointment with the drop and expected bearish trends to continue, particularly after Finance Minister Ishaq Dar’s remarks. They expressed concerns about the government’s uncertainty regarding IMF aid, the upcoming elections, and the impact on market sentiments.
Earlier in the month, the Reform and Revenue Mobilisation Commission (RRMC) proposed implementing income tax rates of 5 percent for listed companies and 7.5 percent for non-listed companies on their distributable reserves. Traders commented on the potential for companies to make contingency plans to avoid the additional tax burden and called for the upcoming budget to provide incentives rather than imposing more taxes.
The Pakistani rupee has experienced significant depreciation against the US Dollar, losing nearly Rs. 59 since January 2023 and over Rs. 107 since April 2022. In the interbank market, the Pakistani rupee lost value against major currencies such as the Saudi Riyal, UAE Dirham, Pound Sterling, Australian Dollar, and Canadian Dollar. However, it gained slightly against the Euro.