The Pakistani Rupee (PKR) shattered its previous record low against the US Dollar (USD) and posted losses in the interbank market today.
It depreciated by 1.37 percent against the USD and closed at Rs. 202.83 after losing Rs. 2.76 in the interbank market today. The local unit hit an intra-day low of Rs. 203.12 against the USD during today’s open market session. This was Rupee’s biggest single-day crash since 2020.
The rupee is down 12.98 percent on a calendar-year-to-date (CYTD) basis. Since last year’s high on 14 May 2021, the local unit has shed 24.92 percent of its value against the dollar.
The rupee reported losses against the dollar for the third consecutive day after rumors suggested the two-month government is considering freezing or placing restrictions on withdrawals from Foreign Currency Accounts, Roshan Digital Accounts, and Safety Deposit Lockers. While the government and State Bank of Pakistan refuted these claims in a joint press release subsequently, their assurances weren’t enough to help the market regain some clarity on the near-term forex outlook.
Today’s sharp decline in the currency ledger mirrored a similar crash in the rupee’s impetus on Monday when it fell 1.08 percent to settle at Rs. 200.6 against the greenback. It is worth mentioning that the PKR first edged beyond the 200 level on May 19.
Other miscellaneous developments reveal that Pakistan’s Real Effective Exchange Rate (REER) has decreased by 0.84 percent to 95.85 in April 2022. This indicates that the Pakistani Rupee (PKR) is undervalued.
Global crude formed new resistance above $119 after briefly peaking at $121.95 on Monday. The US West Texas Intermediate (WTI) settled at $118.2. Crude stabilized on Tuesday as the market balanced out risks associated with supply concerns and the prospect of higher demand as China relaxes its COVID curbs.
The PKR collapsed against the other major currencies in the interbank market today. It lost 73 paisas against the Saudi Riyal (SAR), 75 paisas against the UAE Dirham (AED), Rs. 1.77 against the Euro (EUR), and Rs. 1.85 against the Pound Sterling (GBP).
Moreover, it lost Rs. 1.24 against the Australian Dollar (AUD) and Rs. 1.70 against the Canadian Dollar (CAD) in today’s interbank currency market.
