It lost 0.91 percent of its value against the USD, making it worth Rs. 2.10 less on the interbank market at the end of the day. It was worth Rs. 231.92 instead. During today’s open market session, the local unit hit a low of Rs. 231.75 against the USD.
Since the opening bell, the local unit has been bearish, and it opened at 231.00 at 10:03 AM. By noon, the dollar was worth as little as 230.145 rupees. After 2 PM, the local unit stayed between 230 and 232 against the top foreign currency until the interbank close. Today was the eighth day in a row that the rupee lost value against the dollar. The local unit has lost 5.89%, or Rs. 13.32, against the dollar in the last eight trading days. The PKR has lost 23.89% of its value this calendar year (CYTD) and 11.67% of its value this fiscal year (YTD).
Money changers think the floods are putting more pressure on the country’s import bill, making more people want to buy dollars. This year, there will be fewer cotton and wheat grown, which will raise the cost of imports and throw off the balance of payments. The pressure could continue until the $4 billion promised by friendly countries before the deal with the International Monetary Fund was paid.
On the banking side, managers are opening letters of credit (LCs) with reluctance, slowing down the manufacturing industry. If the due process for LCs is not streamlined soon, there could be a shortage of raw materials and other problems that could hurt the country’s export base.
The country needs political stability, but the government has had a hard time coming up with a clear plan for economic recovery.
Even though trade was choppy on Tuesday, oil prices increased worldwide. That was because investors were more worried about limited fuel supplies before winter than about less demand in China, the biggest crude importer in the world.
