Rupee Ends Week With Losses Against US Dollar After ‘Super Tax’ Rattles Markets

The Pakistani Rupee (PKR) reversed yesterday’s gains against the US Dollar (USD) and posted losses in the interbank market today.

It depreciated by 0.12 percent against the USD and closed at Rs. 207.48 after losing 25 paisas in the interbank market today. The local unit hit an intra-day low of Rs. 208.70 against the USD during today’s open market session. Since 11 April, the greenback is up by Rs. 25.11 against the PKR.

The rupee closed in red against the dollar today after Prime Minister Shehbaz Sharif announced the government’s decision to impose a 10 percent ‘super tax’ on large-scale industries in a bid to shore up fiscal revenue. The tax was announced for Pakistan’s top industrial arms including cement, steel, sugar, oil and gas, fertilizers, LNG terminals, textile, banking, automobile, cigarettes, beverages, and chemicals.

His speech caused the Pakistan Stock Exchange’s benchmark KSE-100 index to plummet by 2,064.9 points before trading was suspended. It was 40,663.62 at midday, down 4.83 percent.

In terms of global factors impacting progress at home, oil prices surged more than $1 per barrel on Friday, boosted by restricted supplies, though crude was on track for a second weekly drop, as investors worried that increasing interest rates would send the global economy into recession.

Brent crude barely settled above $111, while the US West Texas Intermediate (WTI) stayed above $105 at $105.7 per barrel. Both benchmarks were on course towards a second successive weekly decline before the uptick.

The PKR reversed gains against the other major currencies in the interbank market today. It lost 15 paisas against the Canadian Dollar (CAD), 66 paisas against the Australian Dollar (AUD), 67 paisas against the Euro (EUR), and Rs. 2.42 against the Pound Sterling (GBP).

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

Published by
Ahsan Gardezi