The Pakistani Rupee (PKR) was in the red against the US Dollar (USD) today, losing ground during intraday trade.
It fell 0.01 percent to Rs. 225.43 after hitting an intraday low of 226.435 against the US dollar before the close.
The local currency was all red against the US dollar for the third day in a row, opening trade in the 226 range in the open market. By midday, the dollar had fallen against the rupee.
After 1 p.m., the local currency fell and remained at 226 against the top foreign currency before returning to 225 at the interbank close.
The rupee fell against the US dollar today, with informal rates hovering around 258-270 per dollar.
Money changers attribute this week’s drop to uncertainty surrounding the IMF’s 9th Review, politics, and the REER’s drop below 100.
Pakistan’s economic growth is expected to slow significantly during the fiscal year 2022-23 (FY23), according to the State Bank of Pakistan’s (SBP) annual State of Pakistan’s Economy report.
Taking into account the devastation caused by floods and the policy focus on stabilisation, the SBP projects real GDP growth of 3-4 percent for FY23, which is lower than the previously announced range of 3-4 percent.
Markets reacted negatively to the central bank’s concern about inflation, which is expected to exceed 20% in the remainder of FY23.
Supply shocks such as the rollback of energy subsidies and the resumption of fuel taxation, as well as agricultural production losses due to flooding, are likely to influence the inflation trajectory this year.
Since June 2022, the elimination of subsidies and increase in fuel taxation have resulted in a sharp increase in inflation, which is expected to continue in FY23.
On Thursday, global oil prices rose for the fourth day in a row, as crude, heating oil, and jet fuel stocks in the United States tightened ahead of a harsh winter.
Brent crude was up $1.44, or 1.75 percent, to $83.64 per barrel at 4:15 PM, while US West Texas Intermediate (WTI) was also up, at $79.70 per barrel.
On Wednesday, both benchmark contracts rose after government data revealed that US crude inventories fell much more than expected, with a 5.89 million barrel drop for the week ending December 16.
The post-COVID surge in travel for the end-of-year holiday season is expected to increase jet fuel consumption, though demand for transportation fuel may fall if the storm prevents people from travelling.
In the interbank market today, the PKR was weak against the majority of the other major currencies. It held its ground against the Saudi Riyal (SAR) and the UAE Dirham (AED), gaining 87 paisas against the Pound Sterling (GBP).
In today’s interbank currency market, it lost 27 paisas against the Euro (EUR), 51 paisas against the Canadian Dollar (CAD), and Rs. 2 against the Australian Dollar (AUD).
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