The Pakistani Rupee (PKR) slid closer to its all-time low against the US Dollar (USD) and posted losses during intraday trade today.
It depreciated by 0.31 percent against the USD and closed at Rs. 239.65 after losing 74 paisas in the interbank market today. The local unit quoted an intra-day low of Rs. 240.30 against the USD during today’s open market session.
The local unit was all red at the opening bell and was trading at 239.00 at 11 AM. By midday, the greenback went as low as 239.500 against the rupee. After 2 PM, the local unit stayed at the 239 level against the top foreign currency before the interbank close.
The rupee closed in red against the dollar for the 14th consecutive day today and now is just Rs. 0.29 away from its all-time low of Rs. 239.94 against the greenback. The open market continues to experience a shortage of US currency.
In the last 14 consecutive trading sessions, the PKR has fallen by 8.78 percent or Rs. 21.05 against the US$, closing near its all-time low of 239.94 which was first recorded on 28 July 2022. On a calendar year-to-date (CYTD) basis, the local unit is down 26.35 percent, and 14.52 percent on a fiscal YTD.
The drop can be attributed to a number of factors, including the ongoing surge in dollar demand from local importers, the country’s dwindling forex reserves, and rising import bills in the aftermath of the worst floods.
Money changers say that at the moment, there is too much PKR running after the dried-up USD market. Both Pakistanis and Afghans own this PKR. Exchange companies are claiming that they have just $2,000-$3,000 available but at mammoth rates of 257-260. Currently, for a market of over Rs. 7.5 trillion in circulation, there is nothing available at the open market rate of 245 against the dollar.
Globally, oil rose nearly 3 percent on Wednesday after Russian President Vladimir Putin announced a partial military mobilization, escalating the conflict in Ukraine and raising concerns about a possible shortage of oil and gas.
Brent crude was up by 2.34 percent at $92.74 per barrel, while the US West Texas Intermediate (WTI) went up by 2.41 percent to settle at $85.96 per barrel.
According to Reuters, Putin stated that he had signed a decree for partial mobilization to begin on Wednesday, claiming that he was defending Russian territories and that the West wanted to destroy Russia.
Following the outbreak of the Ukraine war, oil prices soared to multi-year highs in March. Prices were also boosted by signs of a recovery in China which had been hit by COVID-19 shutdowns.
This week, investors have been bracing for another aggressive interest rate hike from the United States Federal Reserve, which they fear will lead to a recession and a drop in fuel demand.
The PKR reversed losses against most of the other major currencies in the interbank market today. It gained 34 paisas against the Australian Dollar (AUD), 70 paisas against the Canadian Dollar (CAD), Rs. 1.45 against the Pound Sterling (GBP), and Rs. 1.72 against the Euro (EUR).
Conversely, it lost 18 paisas against the Saudi Riyal (SAR) and 20 paisas against the UAE Dirham (AED) in today’s interbank currency market.