Rupee Crashes Against US Dollar on April Fool’s Day

The Pakistani Rupee (PKR) continued its historic landslide against the US Dollar (USD) and reported losses in the interbank market today. The local currency lost 61 paisas against the greenback at the close of the session today.

It depreciated by 0.46 percent against the USD and closed at Rs. 184.09 today after losing 83 paisas and closing at Rs. 183.48 in the interbank market on Thursday, 31 March. The domestic currency hit an intra-day low of Rs. 184.50 against the USD during today’s open market session.

Today’s losses come on despite a drop in oil prices which fell in and out of red territory on Friday after developments that the International Energy Agency (IEA) member countries were prepared to discuss a release of emergency oil reserves alongside. At the time of filing this report, Brent crude futures were down to $105 a barrel. U.S. West Texas Intermediate (WTI) futures settled at $100.2 a barrel, after touching a low of $99.91.

At home, foreign reserves held by the State Bank of Pakistan (SBP) witnessed a staggering outflow of $2.915 billion in the week that ended on March 25, 2022, depicting a 19.5 percent decline on a week-on-week basis. The SBP weekly report released on Thursday revealed that the country’s total liquid foreign exchange reserves went down by $2.885 billion (-13.4%) on March 25, 2022, to $18.55 billion, compared to $21.44 billion in the previous week. The SBP reserves decreased by $2.91 billion to $12.05 billion, compared to $14.96 billion a week earlier.

Discussing the local currency’s performance earlier during the day, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, remarked that SBP’s net reserves fell to $12.047 billion. It decreased drastically as a result of the maturity of a number og Chinese financing facilities utilized against the BOP. While a chunk of the rollover has been delayed, the “mpact of another large payment could be felt in coming weeks which is exerting pressure on PKR”.

The PKR struggled against most of the major currencies and reported losses in the interbank currency market today. It lost 16 paisas against both the UAE Dirham (AED) and the Saudi Riyal (SAR), 40 paisas against the Canadian Dollar (CAD), 59 paisas against the Pound Sterling (GBP), and 82 paisas against the Australian Dollar (AUD).

Conversely, it gained Rs. 1.09 against the Euro (EUR) in today’s interbank currency market.

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