PKR Again Drops Below 220 Against US Dollar After Dar Struggles to Woo Donors [Updated]

The Pakistani Rupee (PKR) continued its decline against the US Dollar (USD) and posted losses during intraday trade today after Finance Minister Ishaq Dar failed to convince donors on funneling more investments into the cash-strapped country. It depreciated by 0.37 percent and closed at Rs. 219.71 after losing 81 paisas against the greenback. The local unit quoted an intraday low of 220.985 against the greenback. The local unit was all red in the morning against the greenback and resumed trade at 219.50 in the open market. By 10:15 AM, the greenback went as low as 219.75 against the rupee. By midday, the greenback went as low as 219.90 against the rupee. After 1 PM, the local unit slid further and stayed at the 220-221 level against the top foreign currency before the interbank close. The interbank-open market gap widened by more than Rs. 5 as informal rates ranged between 228 and 238 against the interbank low of >220 against the US Dollar. The rupee reported losses for the fifth consecutive day today. Money changer view today’s exchange rate slippage as a reduction in Dar-inspired sentiments that began losing effect last week. Exporters are nervous about multilateral donors’ reluctance on diverting cash inflows toward Pakistan, with Finance Minister Ishaq Dar apparently struggling to woo investors and crisis lenders in Washington. Globally, oil dropped on Tuesday despite a weaker US dollar and supply concerns and gains limited by the threat of lower fuel demand from China, which maintains its stringent zero-COVID policy. Brent crude was down by 0.29 percent at $91.35 down per barrel, while the US West Texas Intermediate (WTI) tumbled by 0.37 percent to settle at $85.14 per barrel. The US dollar index, which compares the greenback to six major currencies, including sterling, fell to its lowest level since October 6. A weaker dollar makes oil cheaper for buyers holding other currencies, increasing their proclivity to buy. Crude prices soared in early 2022, with Brent approaching its all-time high of $147 in March after Russia invaded Ukraine, exacerbating supply concerns. Concerns about a recession, high-interest rates, and dollar strength have since weighed on the market. The PKR slid further against most of the other major currencies in the interbank market today. It lost 22 paisas against the UAE Dirham (AED), Rs. 1.71 against the Australian Dollar (AUD), Rs. 1.83 against the Canadian Dollar (CAD), Rs. 2.49 against the Pound Sterling (GBP), and Rs. 2.99 against the Euro (EUR). Conversely, it gained Rs. 1.10 against the Saudi Riyal (SAR) in today’s interbank currency market.