The Pakistani Rupee (PKR) reversed gains against the US Dollar (USD) and posted losses during intraday trade today.
It depreciated by 0.17 percent against the USD and closed at Rs. 218.98 after losing 38 paisas in the interbank market today. The local unit quoted an intra-day low of Rs. 219.11 against the USD during today’s open market session.
The local unit was bullish in the morning against the greenback and traded on the 217 level in the open market at 10:24 AM. By midday, the greenback went as low as 219 against the rupee. After 2 PM, the local unit continued to trade at the same level against the top foreign currency before the interbank close.
The rupee ended its 3-day winning streak against the dollar today after the International Monetary Fund (IMF) projected Pakistan’s GDP growth to decelerate to 3.5 percent and average Consumer Price Index (CPI) inflation to surge to 20 percent in the fiscal year 2023. The lender in its latest report noted stated that risks to the outlook and program implementation remain high and tilted to the downside given the very complex domestic and external environment.
IMF also expects Pakistan’s external debt to reach $140.959 billion in 2022-23, up from $130.127 billion in 2021-22. Additionally, higher interest rates, a larger-than-expected growth slowdown due to policy tightening, pressures on the exchange rate, renewed policy reversals, slower medium-term growth, and contingent liabilities related to SOEs pose significant risks to debt sustainability.
Money changers said today that the PKR fell today due to increased pressure on the import bill and currency smuggling to Afghanistan. The recent floods have destroyed infrastructure, houses, factories, and crops, as well as killed livestock, and as a result, the government removed duties to help out the flood victims. The country recently began importing vegetables, and all of this, as well as the government’s lifting of the import ban on non-essential and luxury items, is impacting the import bill, and with that, the rupee.
Globally, oil prices went up on Friday on developments that OPEC+ will discuss output restrictions at a meeting on September 5, although fears over China’s COVID-19 curbs and weak global growth continued to lessen gains.
Brent crude was up by 2.05 percent at $94.25 per barrel, while the US West Texas Intermediate (WTI) recovered its weekly losses and went up by 2.12 percent to settle at $88.45 per barrel.
Both benchmarks fell 3 percent to two-week lows in the previous session, with Brent on track for a weekly drop of nearly 6 percent and WTI on track for a 4 percent drop before today’s pullback. Overall, the market is also keeping an eye out for a possible price cap on Russian oil exports.
The PKR was in positive stride against some of the other major currencies in the interbank market today. It gained 30 paisas against the Euro (EUR), 44 paisas against the Pound Sterling (GBP), and 49 paisas against the Australian Dollar (AUD).
Conversely, it lost nine paisas against the Saudi Riyal (SAR), 10 paisas against the UAE Dirham (AED), and 61 paisas against the Canadian Dollar (CAD) in today’s interbank currency market.
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