The Pakistani Rupee (PKR) continued to lose against the US Dollar (USD) and posted losses today.
It depreciated by 0.23 percent against the USD and closed at Rs. 218.38 after losing 49 paisas in the interbank market today. The local unit quoted an intra-day low of Rs. 217.85 against the USD during today’s open market session.
The local unit was bearish when trade resumed against the greenback and opened trade at 217.50 in the open market. By 10:15 AM, the greenback went as low as 217.00 against the rupee. By midday, the greenback went as high as 217.25 against the rupee. After 2 PM, the local unit was still red and stayed at the 217 level against the top foreign currency before the interbank close.
The rupee continued to lose against the US Dollar second day in a row today since Finance Minister Ishaq Dar left for the United States to attend the World Bank (WB) and International Monetary Fund (IMF) annual meetings (IMF).
The finance minister will meet with officials from the IMF and World Bank to discuss the economic situation and the loan program. During his visit, Dar is also expected to meet with officials from Moody’s.
Money changers said last month’s uncertainty is making an unwelcome appearance in the market as exporters slowed greenback exchange on account of the concerning performance of Pakistan’s dollar-denominated Eurobonds. The IMF estimates the country’s debt to average maturity in 2022 at 29 percent of GDP with a total financing need of about 30.3 percent of the GDP. The projected interest rate – growth differential 2022-27 is -7.1 percent.
According to Bloomberg data, the yield on 2024 bonds has clocked in at 80 percent, the highest ever seen for a supposedly non-defaulting economy. The bond market reaction has heightened fears of a default, causing its international market government debt to plummet. A broad spectrum of debt servicing statistics reveals Pakistan’s Eurobond yields have entered the red zone at 26.8 percent, second only to Sri Lanka whose instruments offer the worst-performing yields at 36.0 percent.
Globally, oil prices rose on Thursday, bolstered by an OPEC+ decision to cut supplies last week, even as the International Energy Agency warned that the cuts could push the global economy into recession.
Brent crude was up by 0.40 percent at $92.82 per barrel, while the US West Texas Intermediate (WTI) went up by 0.32 percent to settle at $87.55 per barrel.
Because of entrenched inflationary pressure, quantitative tightening, continuous increases in borrowing costs, a strong dollar, and COVID-related constraints in China, the prospect of sustained growth is rapidly deteriorating.
The energy market is also under pressure from the US dollar, which has risen significantly, including against low-yielding currencies such as the yen.
The PKR reversed gains against the other major currencies in the interbank market today. It lost five paisas against the Canadian Dollar (CAD), 12 paisas against the Saudi Riyal (SAR), 13 paisas against the UAE Dirham (AED), 15 paisas against the Euro (EUR), and Rs. 1.55 against the Pound Sterling (GBP).
Moreover, it dropped 67 paisas against the Australian Dollar (AUD) in today’s interbank currency market.
our currency is a garbage joke now, sorry to say… How it relies on incoming and going of one person blows my mind… So in future if something happens to that party personnels, then means currency should collapse and country should go bankupt? Only country in the world where currency is dependent on some personnels of a party who don’t know abc’s of finance decisions instead of surrounding economic conditions.. Shabash…