The Pakistani Rupee (PKR) dropped further against the US Dollar (USD) and posted losses during intraday trade today.
It depreciated by 0.22 percent and closed at Rs. 222.41 after losing 49 paisas against the greenback. The local unit quoted an intraday low of 222.75 against the greenback.
The local unit was all red in the morning against the greenback and opened trade at 222.30 in the open market. By midday, the greenback moved higher against the rupee. After 1 PM, the local unit was red and stayed on the 222 level against the top foreign currency before the interbank close.
The rupee reported losses for the fourth consecutive day against US Dollar today as default risk continued to rise.
Money changers said the PKR is under pressure due to persistent importer dollar demand. Furthermore, a drop in foreign exchange reserves and ongoing political turmoil weighed heavily on the rupee’s sentiment.
They also said the current regulatory environment coupled with the sudden resumption in the clearance of letters of credit (LCs) had created sporadic shortages of the greenback as dollar sellers were spending more time looking for the top currency or simply hoarding it for profit.
In broader terms, markets were bearish with Pakistan’s benchmark 5-year Credit Default Swap (CDS) spiking on 15 November to 75.5 percent. The instrument has widened by over 19.29 percentage points in the last 24 hours and shows that investors have panicked amid the country’s foreign exchange reserves depleting by over $10 billion in the past 11 months.
Globally, oil prices rose on Wednesday, erasing earlier losses, but rising COVID-19 cases in China limited gains. Earlier in the session, both benchmarks fell more than $1.
At 3:45 PM, Brent crude was up by 0.71 percent at $94.53 per barrel, while the US West Texas Intermediate (WTI) was up by 0.44 percent to settle at $87.30 per barrel.
According to oil pipeline operators in Hungary and Slovakia, oil supply to parts of Europe via a section of the Druzhba pipeline was temporarily suspended on Tuesday. Reuters reported that the disruption coincided with an explosion in eastern Poland near the Ukraine border, which killed two people and raised the prospect of a spillover of the Russian-Ukraine conflict.
The PKR was bearish against the other major currencies in the interbank market today. It lost 35 paisas against the Canadian Dollar (CAD), 56 paisas against the Euro (EUR), 81 paisas against the Australian Dollar (AUD), and Rs. 1.91 against the Pound Sterling (GBP).
Moreover, it lost 13 paisas against the Saudi Riyal (SAR) and 13 paisas against the UAE Dirham (AED) in today’s interbank currency market.
