Market Unresponsive: PKR Nears All-Time Low Against US Dollar As Woes Multiply

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

It depreciated by 0.45 percent against the USD and closed at Rs. 237.91 after losing Rs. 1.07 in the interbank market today. The local unit quoted an intra-day low of Rs. 239.765 against the USD during today’s open market session.

The local unit was in red from the opening bell and was trading at 238.25 at 10 AM. By midday, the greenback went as low as 239.125 against the rupee. After 2 PM, the local unit stayed at the 238 level against the top foreign currency before the interbank close.

The rupee closed in red against the dollar for the twelfth consecutive day today. The local unit failed to positively react against the US$ despite Sunday’s news that the Saudi Fund for Development (SFD) confirmed the rollover of a $3 billion deposit placed with the State Bank of Pakistan (SBP) set to mature on December 5, 2022, for one year.

With today’s fall, the PKR is less than 2 rupees away from reaching its all-time low of 239.94 against the dollar.

Globally, oil prices fell by more than 1.5 percent on Monday, hit severely by forecasts of weaker global demand and by US dollar strength ahead of a possibly significant increase in interest rates, though supply worries limited the decline.

Brent crude was down by 1.82 percent at $89.69 per barrel, while the US West Texas Intermediate (WTI) went down by 2.00 percent to settle at $85.08 per barrel. Oil was also pressured by hopes that Europe’s gas supply crisis would be alleviated. German buyers reserved capacity to receive Russian gas through the now-closed Nord Stream 1 pipeline, but this was later revised and no gas has flowed.

Crude prices have skyrocketed this year, with the Brent benchmark approaching its all-time high of $147 in March after Russia’s invasion of Ukraine exacerbated supply concerns. Prices have since fallen as a result of concerns about weaker economic growth and demand.

The US dollar remained near a two-decade high ahead of the Fed’s and other central banks’ decisions this week. A stronger dollar raises the price of dollar-denominated commodities for holders of other currencies, putting pressure on oil and other risk assets.

The PKR fell against the other major currencies in the interbank market today. It lost 20 paisas against the Canadian Dollar (CAD), 62 paisas against the Australian Dollar (AUD), and 52 paisas against the Pound Sterling (GBP).

Moreover, it lost 27 paisas against the Saudi Riyal (SAR), 20 paisas against the UAE Dirham (AED), and 86 paisas against the Euro (EUR) in today’s interbank currency market.