The Pakistani Rupee (PKR) reversed gains against the US Dollar (USD) and posted losses during intraday trade today.
It depreciated by 0.10 percent and closed at Rs. 221.64 after losing 22 paisas against the greenback. The local unit quoted an intraday low of 222 against the greenback.
The local unit was bearish in the morning against the greenback and resumed trade at 221.7 in the open market. By midday, the greenback moved marginally higher against the rupee. After 1 PM, the local unit was red and stayed on the 221 level against the top foreign currency before the interbank close.
The rupee reversed its four-day winning streak against US Dollar today after yesterday’s shocker that forex reserves held by the central bank decreased by over 10 percent or $956 million in just one week. The central bank statement at the time said that major external debt repayments executed during the week included repayment of commercial loans. Refinancing of these loans is in the process which will improve foreign exchange reserves in the coming weeks.
Money changers view the massive drop in reserves as a significant factor behind today’s slump, including the rising political uncertainty that made dollar holders reluctant to sell their greenbacks.
Globally, oil prices rose more than 3 percent on Friday after China’s health authorities, the world’s largest crude importer, relaxed some of the country’s strict COVID restrictions. Prices rose on Friday as milder-than-expected US inflation data reinforced hopes that the Federal Reserve would slow rate hikes, increasing the likelihood of a soft landing for the world’s largest economy.
At 3:45 PM, Brent crude was up by 3.07 percent at $96.55 per barrel, while the US West Texas Intermediate (WTI) soared by 3.34 percent to settle at $89.36 per barrel. Both benchmarks rose more than $4 today, helped by another drop in US oil inventories, despite the US Federal Reserve raising interest rates by 75 basis points.
A weaker US dollar supports oil prices by making the commodity more affordable to buyers holding other currencies.
Pertinently, crude rose earlier this year as Russia’s invasion of Ukraine raised supply concerns, with Brent approaching its all-time high of $147.
The PKR was bearish against the other major currencies in the interbank market today. It lost Rs. 5.19 against the Euro (EUR), Rs. 2.74 against the Canadian Dollar (CAD), Rs. 5.24 against the Australian Dollar (AUD), and Rs. 7.54 against the Pound Sterling (GBP).
Moreover, it lost five paisas against the UAE Dirham (AED) and seven paisas against the Saudi Riyal (SAR) in today’s interbank currency market.
