Rupee Breaks 11-Day Winning Streak Against US Dollar Despite IMF News and Oil Drop

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The Pakistani Rupee (PKR) fell against the US Dollar (USD) and recorded losses during intraday trade today.

It depreciated by 0.46 percent against the USD and closed at Rs. 214.88 after losing 98 paisas in the interbank market today. The local unit quoted an intra-day high of Rs. 213 against the USD during today’s open market session.

The local unit remained bearish against the greenback and was trading at Rs. 213.65 in the open market around 10 AM. By midday, the greenback went on to trade between 214-214.3 against the rupee. After 2 PM, the local unit was trading on the 214 level against the top foreign currency before the interbank close.

The rupee closed in red against the dollar after eleven upward consecutive gains today despite today’s news that the International Monetary Fund (IMF) and Pakistan have come to an agreement on the Letter of Intent (LoI).

Market experts suggest the PKR underwent a bit of a correction today since it had gained a little way too much against the US$. Regardless, while market corrections can be challenging, a slight drop may not have an adverse effect since corrections are sometimes considered positive for both the market and for investors.

Interestingly, the local unit fell despite overseas investors’ positive sentiments for Pakistani bonds and stocks. A report published in Bloomberg said that the Pakistani rupee, bonds, and stocks are rallying as confidence grows that the cash-strapped country is finally nearing the elusive IMF bailout.

It is noteworthy that Pakistan has also secured $4 billion from friendly countries, fulfilling the condition set by the IMF.

Globally, oil prices continued to remain bearish and sinked to a six-month low for the second time in two weeks after a brief rally as fears about the prospect of a global recession that would dampen demand overshadowed reports showing lower US crude and gasoline stocks.

Brent crude was down by 0.73 percent at $93.01 per barrel, while the US West Texas Intermediate (WTI) fell and went down by 0.80 percent to settle at $87.22 per barrel.

The PKR dropped against the other major currencies in the interbank market today. It lost 26 paisas against the Saudi Riyal (SAR), 26 paisas against UAE Dirham (AED), 95 paisas against the Euro (EUR), Rs. 1.20 against the Canadian Dollar (CAD), and Rs. 2.05 against the Pound Sterling (GBP).

Conversely, it gained Rs. 1.71 against the Australian Dollar (AUD) in today’s interbank currency market.

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