Rupee Gains 3rd Day in a Row As Markets Snub Dollar ‘Shortage’

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

It appreciated by 0.31 percent and closed at Rs. 219.73 after gaining 67 paisas against the greenback. The local unit quoted an intraday low of 221.75 against the greenback.

The local unit was stable in the morning against the greenback and resumed trade at 219.75 in the open market. By 10:15 AM, the greenback went as low as 219.25 against the rupee. By midday, the greenback went as high as 221.025 against the rupee. After 1 PM, the local unit recovered marginally but stayed on the 219 level against the top foreign currency before the interbank close.

The rupee gained further against the US Dollar for the third consecutive day today despite reports of a USD shortage in the markets today. Meanwhile, Pakistan’s finance frontman Ishaq Dar alongside PM Shehbaz Sharif traveled to Saudi Arabia to get rollover relief on a $3 billion deposit nearing maturity.

Dar is expected to head to China for similar relief on another $6.3 billion debt payment nearing maturity. Money changers told ProPakistani that news of Pakistan’s rollover requests is triggering a shortage of the greenback, with many exporters forecasting yet another PKR slip-and-slide as reserves come under pressure.

Traders have said while “friendly countries” are expected to release $4 billion in support for Pakistan, uncertainty on the government’s ability to provide assurances has put the money markets in quite a fix. “It is no longer a game of sentiments and hope-infused news on foreign inflows but how domestic markets play the scales. They’re shorting the dollar again, and this time the consequences could be serious,” a trader said in her statement to ProPakistani.

On Monday the market nearly ran out of US dollars, with transactions taking place only on special requests as some currency dealers struggled to ensure availability at a time when the rupee had only started recovering last week’s losses.

Globally, oil prices fell by more than $1 per barrel on Tuesday as weak economic data from key global economies fueled demand concerns. Much of the bleak outlook for demand has already been baked in, so any additional downward pressure could be detrimental.

Brent crude was down by 1.49 percent at $91.87 down per barrel, while the US West Texas Intermediate (WTI) slid by 1.47 percent to settle at $83.34 per barrel.

Crude supply and demand fundamentals remain largely stable, putting economic sentiment at the center of the oil market. However, signs of uncertain economic activity in the world’s two largest oil consumers, the United States and China, continued to weigh on prices today.

The PKR recovered against some of the other major currencies in the interbank market today. It gained 16 paisas against the Saudi Riyal (SAR), 18 paisas against the UAE Dirham (AED), 49 paisas against the Canadian Dollar (CAD), and 89 paisas against the Pound Sterling (GBP)

Conversely, it lost seven paisas against the Australian Dollar (AUD) and 12 paisas against the Euro (EUR) in today’s interbank currency market.