For the First Time Ever, Rupee Plunges Below 186 Against US Dollar

The Pakistani Rupee (PKR) continued its hopeless fall against the US Dollar (USD) and reported losses in the interbank market today. The local currency lost 89 against the greenback at the close of the session today. It depreciated by 0.48 percent against the USD and closed at Rs. 186.13 today after losing Rs. 1.14 and closing at Rs. 185.23 in the interbank market on Tuesday, 5 April. The domestic currency hit an intra-day low of Rs. 186.30 against the USD during today’s open market session. The rupee crashed to yet another all-time low against the dollar after futures climbed on Wednesday, reversing early losses, as the potential of fresh sanctions against Russia stoked supply concerns, offsetting fears about lower demand caused by a rise in US oil stocks and China’s extended lockdown in Shanghai due to COVID. At the time of filing this report, Brent futures were up by 1.4 percent to $108 per barrel. US West Texas Intermediate (WTI) futures climbed by $1.60 to $103.6 a barrel, after dipping to as low as $103.17 in early trade. At home, the exchange rate was largely impacted by the on-the-ground constitutional crisis as Prime Minister Imran Khan began his defense in the Supreme Court today after foiling the opposition’s attempt to oust him from power. Discussing the local currency’s performance earlier during the day, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, remarked that the PKR has dropped to new lows, falling below 185. Since the 9-month trade deficit has expanded to $35.4 billion, the SBP is concerned about a possible slowdown as its FX reserves deplete and IMF discussions stall. He added, “Only [a] sharp cut in imports may help. Political uncertainty is adding to economic woes”. The PKR struggled against most of the major currencies and reported losses in the interbank currency market today. It lost nine paisas against the Pound Sterling (GBP), 21 paisas against the Canadian Dollar (CAD), 23 paisas against the Saudi Riyal (SAR), and 24 paisas against the UAE Dirham (AED). Conversely, it gained eight paisas against the Australian Dollar (AUD) and 62 paisas against the Euro (EUR) in today’s interbank currency market.