The Pakistani Rupee (PKR) got more potent against the US Dollar (USD), and trades during the day showed significant gains. It gained 0.77 percent against the USD and ended the day at Rs. 232.12 after the interbank market gave it Rs. 1.78. During today’s open market session, the local unit was worth as little as Rs. 236.85 per USD.
At 10 a.m., the local unit was trading at 236.40. It had been going up since the market opened. By noon, the dollar was worth as little as 236.82 rupees. After 2 p.m., the local unit stayed at 230–231 against the top foreign currency until the interbank close.
Today, Ishaq Dar was officially sworn in as the Finance Minister in Islamabad, and the rupee kept going down against the dollar for the fourth day in a row. After the ceremony, he said he would work to lower inflation and interest rates. He said the rupee was undervalued and promised a strong response to the worst economic crisis the South Asian country had ever seen.
After Dar talked about inflation and interest rates, bond prices dropped as much as eight cents and hit new lows. The most significant drop was in short-term bonds, with the 2024 bond being bid at 40.2 cents/$. Bonds with maturities in 2025 and 2027 fell by just over 4 cents, while bids for bonds with longer maturities were just over 36.6 cents.
In his fourth term, the chartered accountant has to deal with a balance of payments crisis, foreign reserves that are barely enough to cover a month’s imports, the rupee’s lowest level ever, inflation of more than 27%, and the aftermath of devastating floods.
The rupee has been getting better since Friday. On September 22, it was close to its all-time low of Rs. 239.34. It has gone up Rs. 7.53 in the last four trading sessions.
Our checks of the channels showed that there was panic selling on the open market and that exporters who had kept their profits overseas were now bringing them back to Pakistan. This has improved things on the supply side, and you could see that today on the interbank market.
Wednesday, oil prices were primarily flat around the world. A stronger dollar and more crude storage offset the effects of Hurricane Ian, which cut oil production in the US.
The price of a barrel of Brent crude went up by 0.64 percent to $86.82, while the price of a barrel of US West Texas Intermediate (WTI) crude went up by 0.50 percent to $78.89.
International reports say that Hurricane Ian shut down about 11 percent of the Gulf of Mexico’s oil production or about 190,000 barrels per day. But on Wednesday, the dollar hit a new high against a group of currencies. This was because rising interest rates worldwide made people worry about a recession. A strong dollar makes oil less popular because it makes it more expensive for people in other countries to buy.
In today’s interbank market, the PKR got more potent than the other major currencies. It became 48 paisas stronger against the UAE Dirham (AED), 2.99 rupees stronger against the Canadian Dollar (CAD), 3.76 rupees stronger against the Australian Dollar (AUD), 3.95 rupees stronger against the Euro (EUR), and 4.90 rupees stronger against the Pound Sterling (GBP) (GBP).
On the interbank currency market today, it gained 51 paisas against the Saudi Riyal (SAR).