Rupee Drops Below 222 Against US Dollar, Market Outlook Grim As Politics Intensify

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

It depreciated by 0.44 percent and closed at Rs. 222.47 after losing 96 paisas against the greenback. The local unit quoted an intraday low of 222.750 against the greenback.

The local unit was bearish in the morning against the greenback and resumed trade at 221 in the open market. By 10:15 AM, the greenback went as low as 220.95 against the rupee. By midday, the greenback went as high as 222.125 against the rupee. After 1 PM, the local unit stayed in red and stayed on the 222 level against the top foreign currency before the interbank close.

The rupee lost against the US dollar third day in a row with politics and the overall economic climate hampering growth. Money changers said exporters are once again hoarding the greenback with expectations of another downward spiral in the coming few weeks.

On the political front, Pakistan’s, or perhaps Asia’s most popular public figure Imran Khan has officially commenced the highly awaited long march toward Islamabad in a bid to scare off the coalition government for good. Traders attribute Khan’s meteoric appeal as a decisive factor in driving market sentiments and expect the “PKR to keep performing miserably until a new and improved government takes the reins”.

Globally, oil prices fell on Friday after China, the world’s largest crude oil importer, expanded its COVID-19 curbs, but were on track for a weekly gain due to supply concerns ahead of Europe’s planned cutoff of Russian imports.

At 3 PM, Brent crude was down by 0.86 percent at $96.13 per barrel, while the US West Texas Intermediate (WTI) surged by 1.27 percent to settle at $87.95 per barrel.

The declines on Friday came after Chinese cities doubled down on COVID-19 curbs on Thursday, sealing up buildings, locking down districts, and causing millions to flee in an attempt to halt spreading outbreaks.

Overall, the oil market has profited from a weaker dollar and expectations of a strong Chinese economic recovery, but the focus is now shifting to recession risks, which are dragging down crude demand forecasts for the rest of the year.

The PKR was bearish against some of the other major currencies in the interbank market today. It lost 26 paisas against the UAE Dirham (AED), 27 paisas against the Saudi Riyal (SAR), and 40 paisas against the Canadian Dollar (CAD).

Conversely, it gained 57 paisas against the Australian Dollar (AUD), 70 paisas against the Pound Sterling (GBP), and Rs. 1.69 against the Euro (EUR) in today’s interbank currency market.