Rupee Plunges As US Dollar Globally Hits Highest Level Since July, Brent Down

The Pakistani rupee fell 3rd day in a row against the US Dollar and slipped below 290 during intraday trade today after opening trade at 287.6 in the interbank market.

At 12 PM, it was bearish, falling as low as 292.125 after losing ~Rs. 4 against the greenback.

Later, it recovered to the 291 level between 1:30 PM and 2:30 PM and stayed at that level.

Open market rates (documented) across multiple currency counters rose to the 298-303 range.

At close, the PKR depreciated by 1.04 percent to close at 291.51 after losing Rs. 3.02 against the dollar today.

The informal exchange rate initially docked at 298-302 before spiking.

Today’s cash rate per dollar in Hundi clocked in at the 305-309 band while many channels (undocumented) reported rates as high as 310.

The PKR crashed after Independence Day celebrations, with traders citing political uncertainty and global dominance of the greenback as main big factors behind rupee’s downfall this week.

“A lot of traders are focusing again on informal channels,” said a senior market expert in an emailed response to ProPakistani. “I think there’s so much concern with just the outlook for recurring PKR/USD exchange stabs these days which has again widened the open/interbank gap, and I think one of the biggest currency managers not being able to make their daily interbank targets is a big red flag. The IMF premium is nowhere to be seen”.

Overall, the rupee is down nearly Rs. 70 since January 2023. Since April 2022, it is down over Rs. 120 against the greenback. As per the exchange rate movements witnessed today, the PKR has lost Rs. 3.02 against the dollar today.

A strong reaction by the newly appointed caretaker government could challenge the exchange rate’s benign outlook for dollar rates, with futures implying a big chance that General Elections will most likely be delayed until next year to tame the economy and political landscape. Meanwhile, analysts see SBP’s next market review at more than 100 basis points of ups priced in for the next few months starting from around September 2023.

Globally, oil prices fell on Tuesday due to Western fears about China’s ability to recover from COVID-19, outweighing gains made previously due to tighter supply.

At 4:40 PM, Brent crude was down by 0.82 percent at $85.5 per barrel, while the US West Texas Intermediate (WTI) slid by 1.04 percent to settle at $81.65 per barrel.

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