Rupee Gains Big 9th Day in a Row Against US Dollar As Import Bill Falls

The Pakistani Rupee (PKR) continued its good run against the US Dollar (USD) and posted big gains during intraday trade today.

It appreciated by 0.76 percent against the USD and closed at Rs. 223.94 after gaining Rs. 1.69 in the interbank market today. The local unit quoted an intra-day low of Rs. 229.50 against the USD during today’s open market session.

The local unit was bullish on the opening bell and was trading at 225.25 at 10 AM. By midday, the greenback went as low as 223.375 against the rupee. After 2 PM, the local unit went up and stayed at the 224 level against the top foreign currency before the interbank close.

The rupee continued its good run against the dollar for the ninth consecutive day today amid a reduction in the country’s import bill in September, as well as expectations that the new finance minister, Ishaq Dar, will take steps to control the current rate.

Pakistan’s trade deficit witnessed a decline of 21.42 percent, with a considerable decline in imports and an upward trend in exports during the first quarter of the current fiscal year.

Inflation is also declining, raising hopes that monetary policy will not be tightened further.

Money changers also attribute currency growth to news that the central bank will take action against banks and foreign exchange companies (ECs) involved in exchange rate volatility.

Globally, oil fell slightly on Wednesday after recent gains as OPEC+ producers appeared set to agree on deep output target cuts later in the day despite a tight market. Oil has risen significantly this week in anticipation of OPEC+ cutting the most output since the COVID-19 pandemic in 2020. In reality, a large cut would have a smaller impact because some members are failing to meet their output quotas.

Brent crude was down by 0.14 percent at $91.67 per barrel, while the US West Texas Intermediate (WTI) soared by 0.25 percent to settle at $86.30 per barrel.

The strengthening of the US dollar has also put pressure on crude prices, as it makes oil more expensive for buyers using other currencies. With output cuts expected to be announced today, OPEC+ must walk a fine line. Close the taps too tightly, and prices will skyrocket at the expense of demand destruction. If you cut too little, the sell-off will hurt OPEC+ revenue.

The PKR gained higher against the other major currencies in the interbank market today. It gained 33 paisas against the Euro (EUR), 45 paisas against the Saudi Riyal (SAR), and 46 paisas against the UAE Dirham (AED).

Moreover, it gained 86 paisas against the Canadian Dollar (CAD), Rs. 1.66 against the Pound Sterling (GBP), and Rs. 2.04 against the Australian Dollar (AUD) in today’s interbank currency market.