Rupee Makes History Against US Dollar Despite Sharp Decline in Oil Prices

The Pakistani Rupee (PKR) crashed to another all-time low 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. 179.17 against the USD during today’s open market session.

It depreciated by 0.26 percent against the USD and closed at Rs. 178.98 today after gaining 11 paisas and closing at 178.51 in the interbank market on Friday, 11 March.

The local unit has so far lost 1.40 percent or Rs. 2.47 during 2022. On a Fiscal Year to Date (FYTD) basis, it has depreciated by 13.61 percent or Rs. 21.44.

The rupee closed in red against the dollar today after global oil futures fell by around $7 per barrel as investors set their hopes on diplomatic progress between Ukraine and Russia to end their war. On the flip side, an increase in COVID-19 cases in China and restricted supply movements rattled market players.

At the time of press, Brent futures were down by $4.67, or 4.1 percent, at $108.00 a barrel, and U.S. West Texas Intermediate (WTI) crude fell $5.71, or 5.2 percent, to $103.62 a barrel.

Discussing the local unit’s performance in a tweet earlier today, the former treasury head of Chase Manhattan Bank, Asad Rizvi, remarked that while there is nothing more to say because the interbank market has been adequately controlled in recent weeks, with oil at more than $100 per barrel, the demand for dollars most definitely outnumbers the receivables, which is why forex reserves have fallen.

He added, “Exports & Remittances are up but not good enough to ease the pressure on C/A Deficit”.

The PKR reversed losses against most of the other major currencies and reported gains in the interbank currency market today. It gained four paisas against the Euro (EUR), seven paisas against the Pound Sterling (GBP), and Rs. 1.29 against the Australian Dollar (AUD).

Conversely, it lost 12 paisas against both the Saudi Riyal (SAR) and the UAE Dirham (AED), and 56 paisas against the Canadian Dollar (CAD) in today’s interbank currency market.