The Pakistani Rupee (PKR) reversed gains against the US Dollar (USD) and posted losses in the interbank market today. It lost 47 paisas against the greenback after hitting an intra-day low of Rs. 176.1 against the USD during today’s open market session.
It depreciated by 0.27 percent against the USD and closed at Rs. 175.86 today after gaining 28 paisas and closing at 175.39 in the interbank market on Thursday, 17 February.
The rupee reported losses against the dollar today amid extremely volatile inflationary pressures threatening fiscal consolidation both globally and at home.
Reuters reported that oil prices extended losses on Friday (today) and are headed for a weekly fall as the prospect of increased Iranian oil exports eclipsed concerns of potential supply disruption from the Russia-Ukraine crisis. While benchmark crude futures hit their highest levels since 2014 on Monday, the prospect of an easing of oil sanctions against Iran has set prices on course for their first weekly slump in almost two months.
Conversely, domestic forecasts on the subject of currency-oil parity portray a different picture as the government, on Tuesday, increased (+12.03) the price of petrol to a historic high of Rs. 159.86 per liter. Besides elevating the domestic prices of POL products, the government also increased the petroleum levy by Rs. 4 per liter.
Amid the rising inflationary concerns, the State Bank of Pakistan’s (SBP) weekly report released on Thursday revealed that the country’s total liquid foreign exchange reserves went down by $230.7 million by February 11, 2022, to $23.49 billion, compared to $23.72 billion in the previous week. SBP’s reserves decreased by $241 million to $17.09 billion, compared to $17.33 billion a week earlier.
Discussing the local unit’s performance in a tweet earlier today, the former treasury head of Chase Manhattan Bank, Asad Rizvi, remarked that the Central Bank’s net reserves declined by $241 million to $17.095 billion after “taking a breather”. Despite recent inflows, the increased import cost has kept the pressure up. Moreover, rising oil costs are adding to the troubles, resulting in a rupee-dollar mismatch, which has created a gap, “keeping the PKR under pressure”.
INTER BANK
After taking a breather NET RESERVES WITH SBP fell by $ 241mn to $ 17.095bn.
Despite recent inflows pressure has not subsided due 2higher import bill. Surging oil prices is adding 2the woes in shape of Rs/$ mismatch that has created a gap keeping #PKR under pressure.— Asad Rizvi (@asadcmka) February 18, 2022
The PKR reversed its gains against the other major currencies and reported losses in the interbank currency market today. It lost 12 paisas against both the Saudi Riyal (SAR) and UAE Dirham (AED), 74 paisas against the Canadian Dollar (CAD), and Rs. 1.02 against the Euro (EUR).
Moreover, it lost 86 paisas against the Australian Dollar (AUD), and Rs. 1.41 against the Pound Sterling (GBP) in today’s interbank currency market.
