The Pakistani Rupee (PKR) slid further against the US Dollar (USD) and posted losses during intraday trade today.
It depreciated by 0.23 percent and closed at Rs. 221.95 after losing 51 paisas against the greenback. The local unit quoted an intraday low of 222 against the greenback.
The local unit was green in the morning against the greenback and resumed trade at 221.0 in the open market. By midday, the greenback went as high as 221.5 against the rupee. After 1 PM, the local unit was all red and stayed on the 221-222 level against the top foreign currency before the interbank close.
The rupee dropped further against the US Dollar today after markets failed to snub international pressures impacting the local unit. The drop came after the US Federal Reserve on Wednesday raised interest rates by three-quarters of a percentage point, saying that the fight against inflation will necessitate further increases in borrowing costs, but signaled an inflection point in what has become the fastest US monetary policy tightening in almost four decades.
Money changers view today’s PKR downturn as a reaction to the effects of economic bottlenecks ailing the country since July. Uncertainty coupled with political instability will continue to put pressure on the rupee in the coming weeks, maybe months, they added.
Globally, oil prices fell on Thursday as a US interest rate hike pushed up the dollar and fueled fears of a global recession that would reduce fuel demand, but losses were limited by supply concerns.
At 3:10 PM, Brent crude was down by 1.54 percent at $94.68 per barrel, while the US West Texas Intermediate (WTI) slid by 1.87 percent to settle at $88.32 per barrel. Both benchmarks rose more than $1 on Wednesday, helped by another drop in US oil inventories, despite the US Federal Reserve raising interest rates by 75 basis points.
The strong dollar is negatively impacting oil prices, and some market participants are likely taking profits after recent gains. A strong dollar reduces demand for oil by raising the cost of the fuel for buyers using other currencies.
The PKR was bearish against some of the other major currencies in the interbank market today. It lost 13 paisas against the Saudi Riyal (SAR) and 14 paisas against the UAE Dirham (AED).
Conversely, it gained Rs. 1.24 against the Canadian Dollar (CAD), Rs. 1.84 against the Australian Dollar (AUD), Rs. 1.71 against the Euro (EUR), and Rs. 2.83 against the Pound Sterling (GBP) in today’s interbank currency market.