Rupee Posts Big Gains Against Major Currencies As Markets React to IMF News

The Pakistani Rupee (PKR) rose further against the US Dollar (USD) and posted gains during intraday trade today.

It appreciated by 0.62 percent against the USD and closed at Rs. 218.75 after gaining Rs. 1.36 in the interbank market today. The local unit quoted an intra-day low of Rs. 220.15 against the USD during today’s open market session.

The local unit was trading at positive levels in the morning against the greenback and traded on the 218-219 level in the open market at 10:03 AM. By midday, the greenback went as low as 218.25 against the rupee. After 2 PM, the local unit continued to trade at the same level against the top foreign currency before moderating to a lower level at the interbank close.

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The rupee closed in green against the US dollar second day in a row since the International Monetary Fund’s (IMF) approval to release a $1.17 billion tranche for Pakistan. This, along with experts’ forecast that the PKR will appreciate to 200-210 level in the coming few weeks also pumped markets in favor of the local unit.

With the IMF funds, the outlook for Pakistan’s bond yields is expected to improve further. In the coming few months, it is expected that the country will start receiving foreign direct investments through bilateral and multilateral entities which will likely propel the rupee towards a significant uphill recovery. However, the damages inflicted as a result of record-breaking flooding across the country could dampen efforts for a full-blown recovery in the near term, and the PKR could take periodic hits along the way.

Globally, oil prices slid on Wednesday on investor concerns about the deteriorating state of the global economy, the possibility of central bank interest rate hikes, and increased blockades to curb COVID-19 in China.

Brent crude was down by 3.72 percent at $95.62 per barrel, while the US West Texas Intermediate (WTI) dropped below $90 and went down by 3.46 percent to settle at $88.47 per barrel.

The price shifts since the Russia-Ukraine war began six months ago have discouraged hedge funds and speculators and lessened trading, which in turn has made the market seesaw even more, as seen yesterday.