PKR Slows Decline After Oil Prices Fall by 4%, Closes At 226.95 Against US Dollar

The Pakistani Rupee (PKR) slowed its decline against the US Dollar (USD) but still posted marginal losses during intraday trade today.

It depreciated by 0.01 percent and closed at Rs. 226.95 after losing one paisa. It quoted an intraday low of 227.225 against the greenback before close.

The local unit was initially stable against the greenback after 10 days of consecutive losses and opened trade at 227.10 in the open market. By midday, the greenback moved lower against the rupee. After 1 PM, the local unit was largely stable and stayed at the 226.9 level against the top foreign currency before the interbank close.

The rupee reported losses against the US Dollar today as money changers said any day-to-day surge in the exchange rate is irrelevant unless the central bank manages to bring forex reserves back above 10 figures.

Understandably, exchange firms have decided to bring in more dollars by making foreign trips in order to increase domestic foreign exchange reserves and boost the rupee’s value. ECAP chairman Malik Bostan told Ishaq Dar that exchange companies will ask overseas Pakistanis to help collect dollars which will then be sent back into state coffers.

In any case, exports are a need of the hour where Pakistan can make billions with the right policy shift and better protection against climate disasters. Currently, the situation is delicate. Pakistan’s exports slumped for the fourth consecutive month in December 2022 to $2.304 billion, dropping 3.64 percent compared to the exports of $2.391 billion in November 2022, official data issued by the Pakistan Bureau of Statistics (PBS) showed on Tuesday.

After falling sharply the previous session, oil fell sharply again on Wednesday, bogged down by concerns about weak demand due to the state of the global economy and China’s rising COVID cases. Both benchmarks fell more than 4 percent, with Brent suffering its biggest one-day drop in more than three months.

At 5:10 PM, Brent crude was down by $2,12 or 2.58 percent to reach $79.98 per barrel, while the US West Texas Intermediate (WTI) was also red at $74.93 per barrel.

Top importer China also increased export quotas for refined oil products in the first batch for 2023, indicating that low domestic demand is expected. Saudi Arabia, the world’s largest oil exporter, may cut prices for its flagship Arab Light crude grade to Asia further in February after they fell to a 10-month low this month due to concerns about oversupply.

The PKR was bearish against most of the other major currencies in the interbank market today. It lost 98 paisas against the Euro (EUR), Rs. 2.25 against the Pound Sterling (GBP), and Rs. 2.81 against the Australian Dollar (AUD).

Conversely, it held out against the UAE Dirham (AED), gained one paisa against the Saudi Riyal (SAR), and 22 paisas against the Canadian Dollar (CAD) in today’s interbank currency market.