Rupee Crashes Against Major Currencies After Global Oil Prices Smash 10-Year Record

The Pakistani Rupee (PKR) continued to struggle against the US Dollar (USD) and posted losses in the interbank market today. It lost 21 paisas against the greenback after hitting an intra-day low of Rs. 177.7 against the USD during today’s open market session.

It depreciated by 0.12 percent against the USD and closed at Rs. 177.83 today after losing 21 paisas and closing at 177.62 in the interbank market on Wednesday, 2 March.

The rupee closed in red against the dollar today after global oil prices smashed multi-year highs amid severe supply disruptions across international markets.

Benchmark crude oil prices rose close to $120 a barrel as Russian oil deliveries were disrupted as traders sought to avoid becoming entangled in sanctions.

Support also came from multi-year lows in US petroleum inventory, which helped raise Brent crude futures to $119.84 per barrel, the highest level since 2012. By 10:24 GMT, the contract had risen $2.18, or 1.9 percent, to $115.11 per barrel.

West Texas Intermediate crude in the United States reached a high of $116.57, its highest since 2008, before falling slightly to $113.12, up to $2.52 or 2.3 percent.

It bears mentioning that Brent has risen by almost 37 percent in the last month alone, and the contract’s six-month spread set a record high of more than $21 per barrel on Thursday, indicating highly tight supplies.

Discussing the local currency’s performance earlier during the day, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, remarked that the increased exports contributed to a $3.1 billion decrease in the trade deficit, but greater imports are a poor indicator due to fewer business days in February. While the effects of rising oil prices will be felt next month, the latest remittance data will provide a clearer view of the country’s current account position.

The PKR reversed gains against other major currencies and reported losses in the interbank currency market today. It lost 34 paisas against the Euro (EUR), Rs. 1.25 against the Australian Dollar (AUD), Rs. 1.43 against the Canadian Dollar (CAD), and Rs. 2.21 against the Pound Sterling (GBP).

Moreover, the PKR lost five paisas against both the Saudi Riyal (SAR) and the UAE Dirham (AED) in today’s interbank currency market.