The Pakistani Rupee (PKR) slid further against the US Dollar (USD) and posted big losses during intraday trade today.
It depreciated by 0.89 percent against the USD and closed at Rs. 225.42 after losing Rs. 2.00 in the interbank market today. The local unit quoted an intra-day low of Rs. 226 against the USD during today’s open market session.
The local unit was all red in the morning against the greenback and opened trade at 224.25 at around 10 AM. By midday, the greenback went as low as 224.75 against the rupee. After 2 PM, the local unit dropped to the 224-226 level against the top foreign currency before the interbank close.
The rupee closed in red against the dollar today fifth day in a row as the greenback breaks multi-decade records against other currencies across the world.
The rupee was expected to easily moderate to the 218-219 level in the coming days, but the situation has quickly changed as floods have offset market sentiments on the International Monetary Fund’s (IMF) transfer of funds to Pakistan.
According to preliminary estimates, Pakistan suffered a massive economic loss of $10 to $12.5 billion as a result of the devastating floods, and the government also plans to cut the development budget by Rs. 100 billion.
Last week, the local currency remained largely stable as the market wheezed out a sigh of relief when a $1.16 billion loan tranche arrived after the IMF resumed bailout. However, the economy has been hit by the worst flood in decades, forcing the government to cut growth in half and reduce it to 2.3 percent
.Experts suggest the rupee will face some pressure as Pakistan prepares to buy essential goods/commodities from foreign merchants in the aftermath of the country’s floods.
Globally, oil prices were stable on Thursday after collapsing below support levels a day earlier as an energy standoff between the European Union and Russia focused investor minds on how problematic fuel supply may become.
Brent crude was down by 0.57 percent at $87.50 per barrel, while the US West Texas Intermediate (WTI) went down by 0.61 percent to settle at $81.44 per barrel.
Prices were supported by Russian President Vladimir Putin’s threat to halt the country’s oil and gas exports if European buyers imposed price caps. Only hours later, the European Union proposed capping Russian gas prices, raising the prospect of rationing in some of the world’s wealthiest countries this winter if Moscow follows through on its threat. Russia’s integrated global oil and gas company, Gazprom, has already halted Nord Stream 1 pipeline flows, cutting off a significant portion of Europe’s supply.
The PKR was negative against the other major currencies in the interbank market today. It lost Rs. 2.10 against the Pound Sterling (GBP), 51 paisas against the Saudi Riyal (SAR), 54 paisas against the UAE Dirham (AED), Rs. 3.65 against the Euro (EUR), and Rs. 1.93 against the Canadian Dollar (CAD).
Moreover, it lost Rs. 1.50 against the Australian Dollar (AUD) in today’s interbank currency market.