Rupee Kicks Off November With Gains Against US Dollar

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

It appreciated by 0.11 percent and closed at Rs. 220.65 after gaining 24 paisas against the greenback. The local unit quoted an intraday low of 220.80 against the greenback.

The local unit was green in the morning against the greenback and resumed trade at 220.0 in the open market. By midday, the greenback went as high as 220.50 against the rupee. After 1 PM, the local unit was all green and stayed on the 220 level against the top foreign currency before the interbank close.

The rupee gained against the US Dollar second day in a row today despite domestic woes outpacing growth. Meanwhile, analysts suggest the surge in the value of Pakistani sovereign bonds in the past two days has also boosted sentiment.

Markets also reacted to Finance Minister Ishaq Dar’s announcement Monday that the government wasn’t going to change the prices of petroleum products for the next fifteen days.

During October 2022, the PKR was surprisingly the best-performing currency in the MSCI Frontier Markets, appreciating by 3.4 percent against the US Dollar (USD) and closing at 220.89.

Money changers opined that a few positive developments are surfacing at a time when the country’s forex reserves continue to deplete for 10 consecutive months. However, they cautioned that export earnings are declining, the open market is suffering from a severe lack of US dollars and informal markets are funneling the greenback out of the country.

On bad news, Pakistan’s inflation increased to 26.6 percent on a year-on-year (YoY) basis in October 2022 as compared to an increase of 23.2 percent in the previous month and 9.2 percent in October 2021

Globally, oil prices rose on Tuesday, recouping previous session losses, as a weaker US dollar offset widening COVID-19 curbs in China, which have fueled fears of slowing fuel demand in the world’s second-largest oil consumer.

At 4 PM, Brent crude was up by 1.69 percent at $94.38 per barrel, while the US West Texas Intermediate (WTI) gained by 1.61 percent to settle at $87.92 per barrel. Both benchmarks ended October on a high, posting their first monthly gains since May, after OPEC partner countries, including Russia, announced a 2 million barrel per day cut in output.

Oil prices rose on Tuesday as the US dollar fell from a one-week high against a basket of major currencies, as traders weighed the possibility of a less aggressive Federal Reserve at Wednesday’s monetary policy meeting.

A weaker dollar makes dollar-denominated oil more affordable to buyers holding other currencies, increasing demand for the commodity.

The PKR was bearish against most of the other major currencies in the interbank market today. It lost 13 paisas against the Euro (EUR), 72 paisas against the Australian Dollar (AUD), and 89 paisas against the Canadian Dollar (CAD).

Conversely, it gained six paisas against the UAE Dirham (AED), seven paisas against the Saudi Riyal (SAR), and 94 paisas against the Pound Sterling (GBP) in today’s interbank currency market.