The Pakistani Rupee (PKR) was all red against the US Dollar (USD) and posted losses during intraday trade today.
It depreciated by 0.01 percent and closed at Rs. 225.43 after quoting an intraday low of 226.435 against the greenback before close.
The local unit was all red against the greenback third day in a row and opened trade in the 226 range in the open market. By midday, the greenback moved lower against the rupee. After 1 PM, the local unit dropped and stayed on the 226 level against the top foreign currency before going back to the 225 level at the interbank close.
The rupee reported losses against the US Dollar today with informal rates hovering around 258-270 against the greenback. Uncertainty regarding the IMF’s 9th Review, politics and REER’s drop below 100 are some of the factors behind this week’s drop, according to money changers.
Pakistan’s economic growth is expected to moderate considerably during the financial year 2022-23 (FY23), said the State Bank of Pakistan (SBP) in its annual State of Pakistan’s Economy report. Taking into account the destruction caused by floods and the policy focus on stabilization, the SBP projects real GDP growth below the previously announced range of 3-4 percent for FY23.
Markets reacted to the central bank’s concerning inflation outlook which is expected to go above 20 percent in the remainder of FY23. Supply shocks in the form of the rollback of energy subsidies and resumption of fuel taxation and losses to agricultural production caused by floods are likely to influence the inflation trajectory during the year. The elimination of subsidies and increase in fuel taxation triggered a sharp increase in inflation since June] 2022, and the trend is likely to persist in FY23.
Globally, oil prices rose for the fourth day in a row on Thursday, as crude, heating oil, and jet fuel stocks in the United States tightened ahead of a heavy wintery spell.
At 4:15 PM, Brent crude was up by $1.44 or 1.75 percent to reach $83.64 per barrel, while the US West Texas Intermediate (WTI) was also green at $79.70 per barrel.
Both benchmark contracts rose on Wednesday after government data showed that US crude inventories fell much more than expected, with a 5.89 million barrel drop for the week ending December 16.
Jet fuel consumption is expected to rise as a result of the post-COVID surge in travel for the end-of-year holiday season, though demand for transportation fuel may fall if the storm prevents people from traveling.
The PKR was bearish against most of the other major currencies in the interbank market today. It held out against both the Saudi Riyal (SAR) and the UAE Dirham (AED) and gained 87 paisas against the Pound Sterling (GBP).
Conversely, it lost 27 paisas against the Euro (EUR), 51 paisas against the Canadian Dollar (CAD), and Rs. 2 against the Australian Dollar (AUD) in today’s interbank currency market.