Rupee Hopelessly Falls 8th Day in a Row Against US Dollar Despite Oil Drop

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

It depreciated by 0.02 percent and closed at Rs. 226.41 after losing four paisas. It quoted an intraday low of 226.750 against the greenback before close.

The local unit was bearish against the greenback eighth day in a row and opened trade at 226.50 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 money changers said no amount of “PR-hunting tactics” to sway markets will work as the government continues to dabble needlessly in low-priority projects. On condition of anonymity, an expert told ProPakistani that the current development approvals are nothing more than face-saving attempts to build a marketable portfolio for general elections which will be held next year.

In a similar calling-the-kettle-black situation, foreign investors are bumming out with little to no moneymaking prospects on the horizon in Pakistani markets. Dollar outflows and the deteriorating state of the economy have made Pakistan one of the least desired moneymaking markets for foreign investors, with the repatriation of profits on foreign investments falling by 83.41 percent year on year (YoY) in July-November of the current fiscal year 2022-23.

Market players aren’t sure when business would return to normal levels as various sectors of the economy, including the equity market and debt securities, are projected to struggle with the country still trying to get out of today’s money crunch.

Tempest Gaining Traction Across Asia

Emerging economies all over the Asian block continue to feel the heat as trends forecast a bumpy ride next year. The rising costs for imports of food and fuel, among other goods, have depleted the foreign exchange reserves of some countries and triggered economic crises.

A Deutsche Welle report notes that in South Asia, Sri Lanka and Pakistan have already received assistance from the International Monetary Fund after falling into debt distress and facing balance-of-payments difficulties. Experts predict a challenging economic environment in 2023 amid weakening growth prospects all around for the US, eurozone, and China, and tightening financial conditions.

The World Bank, IMF, and the Asian Development Bank have all downgraded growth forecasts for developing Asia, and countries like Pakistan are set to be especially affected by the slower global expansion, according to predictions.

Globally, oil prices fell more than 2 percent on Thursday as rising COVID-19 cases in China dimmed prospects for a recovery in fuel demand in the world’s largest crude oil importer.

At 4:15 PM, Brent crude was down by $1.51 or 1.81 percent to reach $81.75 per barrel, while the US West Texas Intermediate (WTI) was also red at $77.43 per barrel.

Oil markets were also roiled by expectations of another interest rate hike in the United States, as the Federal Reserve seeks to limit price increases in a tight labor market. According to international media reports citing the American Petroleum Institute data, crude oil inventories in the United States fell by about 1.3 million barrels less than expected in the week ended December 23.

The PKR was bearish against most of the other major currencies in the interbank market today. It held out against the Saudi Riyal (SAR), and gained seven paisas against the Euro (EUR), 65 paisas against the Australian Dollar (AUD), and 71 paisas against the Canadian Dollar (CAD).

Conversely, it lost one paisa against the UAE Dirham (AED) and 29 paisas against the Pound Sterling (GBP) in today’s interbank currency market.