Rupee Posts Small Gains Versus US Dollar After Fitch Announcement

The Pakistani rupee rose higher 3rd day in a row against the US Dollar today after opening trade at 283 in the interbank market. At 11:30 PM, it was bullish, rising as high as 280 after gaining ~Rs. 3 against the greenback during intraday trade. The interbank rate remained at 280-281 before anchoring trends at the 283 level for the remainder of the day. Open market rates across multiple currency counters stood in the 282-284 range today. At close, the PKR appreciated by 0.04 percent to close at 283.51 after gaining 10 paisas against the dollar today. The rupee closed in the green third day in a row today. On a calendar year-to-date basis, it has so far depreciated by 20.13 percent and appreciated by 0.87 percent on a fiscal YTD basis. Overall, the rupee is down nearly Rs. 66 since January 2023. Since April 2022, it is down over Rs. 113 against the greenback. As per exchange rate movements seen today, the PKR has gained 10 paisas against the dollar. In a key development, Fitch Ratings on Thursday affirmed Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘CCC’. Fitch typically does not assign Outlooks to sovereigns with a rating of ‘CCC+’ or below. Fitch said that the ‘CCC’ rating reflects high external funding risks amid high medium-term financing requirements, despite some stabilization and Pakistan’s strong performance on its current Stand-by Arrangement (SBA) with the IMF. The agency said tight financing conditions, rupee depreciation, and weak domestic demand will likely continue to constrain the current account deficit. Traders said today current debt levels and forecasts paint a rather poor picture for Pakistan compared to Fitch analysis and needs particular support for long-term and sustainable recovery.