Rupee Plunges to New All-Time Low Against US Dollar Amid FATF Uncertainty

The Pakistani Rupee (PKR) crashed to a new historic low against the US Dollar (USD) and posted losses in the interbank market today.

It depreciated by 0.52 percent against the USD and closed at Rs. 208.74 after losing Rs. 1.07 in the interbank market today. The local unit hit an intra-day low of Rs. 209.25 against the USD during today’s open market session. Since the arrival of the new government on 11 April, the greenback is up by Rs. 26.35 against the PKR.

The rupee closed in red against the dollar amid rising speculation over the fate of Pakistan’s grey list status with the Financial Action Task Force (FATF). While Pakistani authorities attending the FATF review meeting stated that it is highly likely that Pakistan will exit the grey list, past experiences suggest that nothing will change.

Regardless of today’s result, a FATF team will make onsite visits to Pakistan in the last week of July. These visits will be to particular departments and to conduct interviews with the officers. Similarly, the onsite inspection team will submit a report to the FATF, based on which it will announce the decision of either keeping or removing Pakistan from its grey list.

In terms of global factors impacting the economy at home, oil prices rebounded on Friday a day after a fall triggered by a US interest rate hike. Prices soared amid supply tightness and new sanctions on Iran and more interest rate hikes from major central banks that exacerbated worries about a steep economic slowdown.

Brent crude settled back above $120 after briefly peaking at $120.94 during early trading hours, while the US West Texas Intermediate (WTI) settled above $117 per barrel.

The PKR dipped further against the other major currencies in the interbank market today. It lost 28 paisas against the Saudi Riyal (SAR), 29 paisas against the UAE Dirham (AED), 35 paisas against the Canadian Dollar (CAD), 90 paisas against the Australian Dollar (AUD), and Rs. 5.23 against the Pound Sterling (GBP).

Moreover, it lost Rs. 3.60 against the Euro (EUR) in today’s interbank currency market.