The Pakistani Rupee (PKR) strengthened against the US Dollar (USD) and posted big gains during intraday trade today.
It appreciated by 1.08 percent against the USD and closed at Rs. 229.63 after gaining Rs. 2.49 in the interbank market today. The local unit quoted an intra-day low of Rs. 232 against the USD during today’s open market session.
The local unit was all green at open and was trading at 231.95 at 10 AM. By midday, the greenback went as low as 229.00 against the rupee. After 2 PM, the local unit stayed at the 229-230 level against the top foreign currency before the interbank close.
The rupee continued its massive run against the dollar for the fifth consecutive day today after the new finance minister “bravely” called out speculators toying with the local currency.
The new finance chief, who has previously advocated for intervention in currency markets, also claims that the value of the local unit is undervalued and that he will seek to control inflation by lowering interest rates.
Dar has also warned currency speculators against manipulating the market.
Money managers have tied the rupee’s ongoing recovery to Dar’s return from self-exile after five years. The minister is well-known for defending the value of the national currency. However, given the strengthening of the US dollar globally, Pakistan’s low foreign exchange reserves, and high foreign debt payments, some experts believe the rupee’s recovery will be short-lived.
Pakistan’s dollar bonds fell on Wednesday after Ishaq Dar hinted at slashing interest rates on the very first day of taking charge as the finance minister. Last week, Pakistan’s dollar bonds fell after Prime Minister Shehbaz Sharif made an urgent appeal for debt relief from the rich countries in the wake of one of the worst floods in the country’s history.
Globally, oil prices fell on Thursday, with a stronger dollar canceling out the previous day’s more than $3 gain, though losses were limited by signs that the OPEC+ producer group may reduce output.
Brent crude was down by 0.24 percent at $89.16 per barrel, while the US West Texas Intermediate (WTI) fell slightly by 0.16 percent to settle at $82.02 per barrel.
Both benchmarks had recovered from nine-month lows earlier in the week, helped by a temporary drop in the dollar index and a larger-than-expected drawdown in US fuel inventories. The dollar index, however, rose again on Thursday, dampening investor risk appetite and fueling recession fears.
The PKR gained further against most of the other major currencies in the interbank market today. It gained 15 paisas against the Euro (EUR), 36 paisas against the Pound Sterling (GBP), 68 paisas against the UAE Dirham (AED),68 paisas against the Saudi Riyal (SAR), and 97 paisas against the Canadian Dollar (CAD).
Conversely, it lost seven paisas against the Australian Dollar (AUD) in today’s interbank currency market.