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 49 paisas against the greenback after hitting an intra-day low of Rs. 180.55 against the USD during today’s open market session.
It depreciated by 0.28 percent against the USD and closed at Rs. 180.57 today after losing 63 paisas and closing at Rs. 180.07 in the interbank market on Thursday, 17 March.
The rupee closed at yet another historic low against the dollar after oil prices rose 8 percent on Thursday, extending a string of wild daily swings as the market recovered from several days of losses with a renewed focus on supply constraints as a result of Russian sanctions.
Oil benchmarks have experienced their most volatile spell since the mid-2020s in recent weeks. After falling as buyers cashed in on the run-up, prices have risen again on concerns that the energy market will soon be squeezed. At the time of press, benchmark Brent crude futures surged to $109.1 a barrel, while the US West Texas Intermediate (WTI) crude reversed losses and soared as high as $104.3 a barrel.
It bears mentioning that Brent has moved as high as $139 and as low as $98 in the last eight trading sessions, indicating a gigantic $40 spread. Many investors have already fled, paving the way for further violent price swings in the coming weeks.
At home, 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 $385.3 million on March 11, 2022, to $22.28 billion, compared to $22.66 billion in the previous week. SBP’s reserves decreased by $380.6 million to $15.83 billion (-2.34%), compared to $16.21 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 how Pakistan’s foreign exchange reserves have fallen by $381 million to $15.832 billion. Since February, this is the sixth conservative fall, and with oil weighing hard, a rebound is looming.
He added, “Ongoing domestic/political unrest & talks with IMF is also giving jitters that does not support [the] PKR”.
The PKR struggled against most of the other major currencies and reported losses in the interbank currency market today. It lost 13 paisas against both the Saudi Riyal (SAR) and the UAE Dirham (AED), 80 paisas against the Euro (EUR), 89 paisas against the Canadian Dollar (CAD), and Rs. 1.35 against the Australian Dollar (AUD).
Conversely, it gained eight paisas against the Pound Sterling (GBP) in today’s interbank currency market.