Rupee Struggles Against US Dollar As Oil Prices and Politics Rattle Markets

The Pakistani Rupee (PKR) slid further against the US Dollar (USD) and posted marginal losses during intraday trade today.

It depreciated by 0.03 percent against the USD and closed at Rs. 214.95 after losing seven paisas in the interbank market today. The local unit quoted an intra-day high of Rs. 214.25 against the USD during today’s open market session.

The local unit remained bearish against the greenback and traded at Rs. 214.25 in the open market at 10:16 AM. By midday, the greenback went as high as 214.62 against the rupee. After 2 PM, the local unit was trading thinly below the 215 level against the top foreign currency before the interbank close.

The rupee reported losses against the dollar for the second day in a row despite expected stability in the forex market and promising developments with the International Monetary Fund (IMF).

While the central bank has allowed exchange companies to export foreign currencies other than the US dollar, the rupee’s subtle decline can still be attributed to a scarcity of dollars in the open market.

Market experts forecast the PKR to moderate toward consistency after the IMF Executive Board meeting convenes for Pakistan’s combined seventh and eighth review under the Extended Fund Facility (EFF) on August 29. The Washington-based lender’s resident representative in Islamabad, Esther Perez Ruiz told ProPakistani late on Wednesday. The board will approve a tranche of $1.17 billion for Pakistan after it fulfilled all conditions.

The release of the tranche will provide the country with a much-needed boost. Pakistan’s central bank reserves are currently below $8 billion, the lowest since October 2019. The release will also unlock funding from friendly countries that will further shore up the country’s reserves.

Globally, oil prices rebounded on Thursday as promising US fuel consumption data and estimated drops in Russian supply late in the year offset worries that a possible recession could significantly damage demand. While prices rose more than one percent during the previous close, Brent at one point slid to its lowest since February.

Brent crude was up by 1.44 percent at $95 per barrel, while the US West Texas Intermediate (WTI) recovered marginally and went up by 1.19 percent to settle at $89.16 per barrel.

The PKR fell against some of the other major currencies in the interbank market today. It held out against the Saudi Riyal (SAR), lost one paisa against UAE Dirham (AED), and 31 paisas against the Euro (EUR).

Conversely, it gained 62 paisas against the Canadian Dollar (CAD), 98 paisas against the Australian Dollar (AUD), and Rs. 1.08 against the Pound Sterling (GBP) in today’s interbank currency market.

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