The Pakistani Rupee (PKR) struggled against the US Dollar (USD) and posted losses during intraday trade today.
It depreciated by 0.01 percent and closed at Rs. 226.43 after losing two paisas. It quoted an intraday low of 226.925 against the greenback before close.
The local unit was bearish against the greenback ninth day in a row and opened trade at 226.75 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 after foreign reserves held by the State Bank of Pakistan (SBP) witnessed a substantial outflow of $294 million in the week that ended on 23 December 2022. The declining forex reserves, which stood at nearly $18 billion at the start of 2022 highlight Pakistan’s urgent need for external financing, possibly through bilateral lending partners or – the expected choice – the International Monetary Fund.
Money markets were bearish to developments that the government might promulgate another mini-budget to raise an additional Rs. 60 billion. Traders expressed disappointment at the government’s unorthodox approach to raising funds for improving its external position as the PKR was directly being impacted as a result.
To note, Pakistan is currently engaged in discussions with bilateral partners for arranging inflows somewhere in the region of $6 billion as the South Asian nation scrambles for backup to avoid defaulting on its debt in the coming months.
Globally, oil prices rose on Friday, on course for a second consecutive annual gain in a volatile year marked by tight supplies due to the Ukraine war and weakening demand from the world’s top crude importer, China.
At 4:10 PM, Brent crude was down by $0.12 or 0.14 percent to reach $83.34 per barrel, while the US West Texas Intermediate (WTI) was also red at $78.19 per barrel.
After Russia’s invasion of Ukraine sparked supply concerns, the global benchmark Brent reached $139.13 per barrel in March, the highest since 2008. Prices fell sharply in the second half of 2022 as investors worried about a global recession.
While an increase in year-end holiday travel and Russia’s ban on crude and oil product sales are encouraging, supply toughness will be offset by dwindling consumption due to a deteriorating economic environment next year.
The PKR was bearish against most of the other major currencies in the interbank market today. It lost 56 paisas against the Canadian Dollar (CAD), 56 paisas against the Pound Sterling (GBP), 72 paisas against the Euro (EUR), and Rs. 1.23 against the Australian Dollar (AUD).
Conversely, it held out against the UAE Dirham (AED) and gained one paisa against the Saudi Riyal (SAR) in today’s interbank currency market.