Rupee Crashes to One of Its Biggest Ever Single-Day Drops Against the British Pound

The Pakistani Rupee (PKR) fell to another record low against the US Dollar (USD) and posted losses in the interbank market today.

It depreciated by 0.80 percent against the USD and closed at Rs. 195.74 after losing Rs. 1.56 in the interbank market today. The local unit hit an intra-day low of Rs. 197 against the USD during today’s open market session. The greenback has gained Rs. 9.06 against the rupee since last week, and Rs. 12.81 since the arrival of the new government on 11 April 2022.

The rupee crash-landed to yet another all-time low against the dollar today ahead of Pakistan’s preliminary meetings with the International Monetary Fund (IMF) in Doha on Wednesday (tomorrow) to restart the stalled multibillion-dollar bailout program.

Globally, oil prices scaled their highest level in seven weeks on Tuesday, boosted by the European Union’s persistent drive for a ban on Russian oil imports, which could dangerously limit supply. Brent crude soared as high as $115, its highest since March 28, while the US West Texas Intermediate (WTI) crude gained 78 cents, or 0.7 percent, to $114.98.

In terms of factors impacting the local exchange rate at home, the impending economic fallout due to rising import bills, depleting forex reserves, and the coalition government’s reluctance to take tough fiscal measures have set the rupee on a hopeless plunge. The reactionary forecast suggests that the PKR could touch the Rs. 200 level against the dollar in the next few days.

Komal Mansoor, Head of Strategy at Tresmark. told ProPakistani,

The market is relying on the IMF. Reserves are depleting fast and CDS is at a record high of +900 bps. Plus there is growing political uncertainty. Otherwise, the real value of the Rupee is around 185-187 (based on REER).

The PKR also collapsed against all the other major currencies in the interbank market today. It lost Rs. 2.46 against the Euro (EUR), Rs. 2.5 against the Canadian Dollar (CAD), Rs. 3.19 against the Australian Dollar (AUD), and Rs. 5.93 against the Pound Sterling (GBP).

Moreover, it lost 41 paisas against the Saudi Riyal (SAR) and 42 paisas against the UAE Dirham (AED) in today’s interbank currency market.

Published by
Ahsan Gardezi