US Dollar Climbs Back Above 224 Against PKR As Economic Woes Intensify

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

It depreciated by 0.09 percent and closed at Rs. 224.11 after losing 20 paisas against the greenback. It quoted an intraday low of 224.55 against the greenback before close.

The local unit was initially stable in the morning against the greenback and opened trade in the 224 range in the open market. By midday, the greenback moved higher against the rupee. After 1 PM, the local unit was all red and stayed on the 224 level against the top foreign currency the interbank close.

The rupee reported losses against the US Dollar second day in a row today with the market foreseeing further degradation in economic conditions. Recent data by SBP reveals that Pakistan’s domestic debt to Rs. 50.15 trillion by October 2022 as compared to Rs. 40.2 trillion reported by end of the same month last year, showing a whopping increase of Rs. 10 trillion in debts merely in one year.

Money changers bemoaned that illegal markets are encouraging remittances to be sent via informal channels, which isn’t helping the country’s forex reserves offering an already depleted cover of barely a month.

Globally, oil prices fell on Tuesday after falling more than 3 percent the previous session, as the rollout of sanctions on Russian seaborne crude oil reignited concerns about oversupply, while the relaxation of China’s COVID curbs showed mixed demand.

At 3;55 PM, Brent crude dropped by $0.87 or 1.05 percent to reach $81.81 per barrel, while the US West Texas Intermediate (WTI) was all red at $76.12 per barrel.

Crude futures fell the most in two weeks on Monday after data from the US service sector raised concerns that the Federal Reserve will continue its aggressive policy tightening.

The Group of Seven (G7) set a maximum price of $60 per barrel for Russian crude in order to limit Moscow’s exports turnover, but Russia has stated that it will not comply with the measure even if it means cutting production.

The G7 nations, the European Union, and Australia will enforce the price cap, which comes on top of the EU’s embargo on Russian crude imports by sea and similar pledges by the US, Canada, Japan, and Britain.

The PKR was bearish against some of the other major currencies in the interbank market today. It lost three paisas against the Saudi Riyal (SAR) and five paisas against the UAE Dirham (AED).

Conversely, it gained 95 paisas against the Euro (EUR), Rs. 1.12 against the Pound Sterling (GBP), Rs. 1.45 against the Australian Dollar (AUD), and Rs. 1.83 against the Canadian Dollar (CAD) in today’s interbank currency market.