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Markets

Heavy oil payments: Rupee drops to record low, closes at 202.83 in inter-bank market

  • During the session, rupee even crossed 204 against the US dollar before making a recovery
Published June 7, 2022
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The rupee weakened further in the inter-bank market, closing at 202.83 against the US dollar on Tuesday. This is its lowest closing level in history.

During the session, the rupee remained under pressure and even hit the 204 level before making a recovery.

As per the State Bank of Pakistan (SBP), the currency closed at 202.83 after a day-on-day depreciation of Rs2.77, or 1.37%.

On Monday, the currency had ended at 200.06 against the US dollar in the inter-bank market.

Pakistan's rupee falls another 1.07%, closes over 200 against US dollar

“Oil payments led to massive outflows, creating pressure on the rupee,” Wajid Rizvi, Head of Strategy and Economy at JS Global, told Business Recorder.

He said the government has been unable to finalise external funding agreements pertaining to LNG and inflows with Qatar and the UAE, respectively, which has dented sentiment as well.

“Rupee is expected to lose further ground, unless funding deals are secured,” he said.

The market expert said that the upcoming federal budget to be announced on June 10 would be 'fiscally regressive' and will be filled with measures to increase taxation.

"Probably a super tax could be levied on the energy sector. Such measures, albeit unpopular, would be needed to achieve the tax target," he said.

Meanwhile, Zafar Paracha, General Secretary of Exchange Companies Association of Pakistan (ECAP), informed that there is no demand for dollars in the open market.

"The reason behind the decline is due to irresponsible statements being given by the political parties – both in the government and opposition," he said.

"This has activated speculators in the banking sector, leading to a spike in dollar rate during the week," he said, urging the central bank to manage the volatility in the currency market.

Inter-bank market rates for dollar on Tuesday

BID Rs 202.30

OFFER Rs 202.60

Open-market movement

In the open market, the PKR lost 2.50 rupees for both buying and selling against USD, closing at 202 and 203.50, respectively.

Against Euro, the PKR lost 50 paisas for both buying and selling, closing at 213 and 215, respectively.

Against UAE Dirham, the PKR lost 20 paisas for both buying and selling, closing at 55 and 55.50, respectively.

Against Saudi Riyal, the PKR lost 80 paisas for both buying and selling, closing at 54 and 54.50, respectively.

Open-market rates for dollar on Tuesday

BID Rs 202

OFFER Rs 203.50

Comments

Comments are closed.

Musab Jun 07, 2022 03:23pm
Banning Imports is not the optimal solution for Pakistan in the long run. It might benefit us through relative strong currency in the short run due to lower import pressure, however import dependence is very high and we will lose our price competitiveness in the long run
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samir sardana Jun 08, 2022 07:23pm
Y is bunching happening These are Usance LCs of say 3-6 months tenor,when oil was 85 USD What will happen when oil booked at 120 USD are due for LC retirement Y can the LCs not be rolled over ? Not all LCs - just a few,so that all the LCs do not retire on the same day,& the interbank market CANNOT PREDICT THE DISASTER.Let them guess,how much will be rolled over & WHEN & BY WHICH BANK ? ELSE,THE PUNTERS ON FX ,WILL MINT MONEY - 197 TO 204 in 2 days is half of the BITCOIN MOVE IN 10 DAYS ! ROLL OVERS WILL BE AT NEW US LIBOR RATES & SPREADS & CAN BE DONE WITH CHINESE BANKS. - AS THE CRUDE OIL,WAS CONVERTED INTO FO & DIESEL - SO THE CASH IS THERE ! IT IS EASY TO KNOW THE PAKISTAN OIL CARGOS FROM PORTS - WHO HAVE THE BL,INVOICE, SHIPPING BILL, TANKER DATA.IF NOT ,ONE CAN GET IT FROM KUWAIT OIL .... THE INVOICE HAS THE TERMS OF PAYMENT. REST IS EASY FOR A PUNTER – WHO HAS A 1 SIDED BET.dindooohindoo IN INDIA - RBI WAS INVOLVED IN A 30000 CRORES FX DERIVATIVES SCAM
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