The Pakistani Rupee (PKR) dropped further against the US Dollar (USD) and continued to post losses during intraday trade today.
It depreciated by 0.15 percent and closed at Rs. 226.15 after losing 33 paisas. It quoted an intraday low of 226.725 against the greenback before close.
The local unit was all red against the greenback sixth day in a row and opened trade at 225.95 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 the interbank close.
The rupee reported losses against the US Dollar today as smuggling via the Afghan transit trade worsens market sentiments.
Chairman of the Exchange Companies Association of Pakistan (ECAP) Malik Bostan said at a news conference that approximately $2 billion is transferred from Pakistan to Afghanistan each month via formal/informal channels, smuggling, and border crossings, all of which deplete Pakistan’s forex reserves.
The informal Afghan transit trade is causing tremendous damage to Pakistan’s economy. A large portion of the money traveling from Pakistan to Afghanistan is routed through the region, and both Afghan and Pakistani traders are engaged in this unwholesome activity.
Globally, oil hit a three-week high on Tuesday as China’s latest relaxation of COVID-19 restrictions fueled hopes of a fuel demand recovery, with additional support coming from US energy production cuts caused by winter storms. In a major development impacting oil markets worldwide, China said it will no longer require inbound travelers to be quarantined beginning January 8, according to the National Health Commission, in a major step toward easing restrictions on borders that have been largely closed since 2020.
At 4:15 PM, Brent crude was up by $0.83 or 1 percent to reach $84.75 per barrel, while the US West Texas Intermediate (WTI) was also green at $80.23 per barrel.
In response to the Chinese move, equities rose while the US dollar fell on Tuesday. A weaker dollar lowers the price of oil for holders of other currencies and tends to boost risk assets. Oil also benefited from concerns about supply disruptions caused by winter storms in the United States.
The PKR was bearish against all of the other major currencies in the interbank market today. It lost eight paisas against the Saudi Riyal (SAR), nine paisas against the UAE Dirham (AED), and 52 paisas against the Pound Sterling (GBP).
Moreover, it lost 90 paisas against the Canadian Dollar (CAD), Rs. 1 against the Euro (EUR), and Rs. 1.11 against the Australian Dollar (AUD) in today’s interbank currency market.