The Pakistani Rupee (PKR) collapsed to another low against the US Dollar (USD)and posted heavy losses during intraday trade today.
It depreciated by 1.31 percent against the USD and closed at Rs. 232.93 after losing Rs. 3.05 in the interbank market today. The local unit quoted an intra-day low of Rs. 233.37 against the USD during today’s open market session. Since the regime change, the greenback is up by Rs. 48.98 against the PKR.
The rupee closed in red against the dollar for the sixth day in a row amid increased demand for dollars from importers. People familiar with the matter revealed that these traders want more imports to be allowed while commercial banks find it hard to arrange dollars for them.
Pakistan has spent over $3.5 billion on the import of petroleum products for August and September, and the payment is due in less than five weeks. The impact of this deadline is already causing a frantic scarcity of the greenback in the markets and piling pressure on banks that are already running out of the top foreign currency.
Between April 7 and July 22, the rupee lost 21.3 percent of its value versus the US dollar, owing to the country’s massive trade imbalance as well as mounting political insecurity and uncertainty. The rupee rose to Rs. 204.56 in the first week of July from Rs. 211.93 on June 22. However, it continued to lose value against the dollar but experienced a modest increase when the nation signed a staff-level deal with the International Monetary Fund (IMF) on July 15. Since then, it has continued to decline in every session.
The rupee lost 8.25 percent of its value against the US dollar in the previous week and continues to crash at mortifying levels with little hope for recovery in sight.
In terms of global factors impacting growth at home, oil prices soared on Tuesday for a second consecutive day on rising concerns about worsening European supply after Russia cut gas supply through a major pipeline. Reuters reported that Moscow tightened its gas squeeze on Europe on Monday as Gazprom (GAZP.MM) said supplies through the Nord Stream 1 pipeline to Germany would drop to just 20 percent of capacity.
Brent crude was up by 1.25 percent at $106.5 per barrel, while the US West Texas Intermediate (WTI) edged above yesterday’s levels after futures appreciated by 1.45 percent to settle at $98.10 per barrel.
The PKR reported losses against the other major currencies in the interbank market today. It lost 81 paisas against the Saudi Riyal (SAR), 83 paisas against UAE Dirham (AED), Rs. 3.22 against the Euro (EUR), and Rs. 4.29 against the Pound Sterling (GBP).
Moreover, it lost Rs. 2.73 against the Australian Dollar (AUD) and Rs. 3.44 against the Canadian Dollar (CAD) in today’s interbank currency market.
