Additional losses against the US Dollar were recorded in today’s intraday session for the Pakistani Rupee (PKR). It dropped one paisa against the dollar, or 0.01 percent, to close at Rs. 223.95. The local currency was trading at 224.40 against the US dollar at its intraday low.
The local currency commenced trading at 224.3 on the open market that morning with a bearish opening bias against the US dollar. The dollar depreciated against the rupee by lunchtime.
After one o’clock, the local currency was steady and was steady at 223 versus the major foreign currency until the interbank closure. After the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) raised the policy rate by 100 basis points to 16 percent on Friday, the rupee experienced losses against the US dollar for the fourth day in a row today.
The increase reflected the MPC’s assessment that inflationary pressures had proven to be more intense and enduring than anticipated. It aims to ensure that risks to financial stability are contained and that elevated inflation does not become entrenched, opening the door for greater growth on a more sustainable basis.
Money changers believed that the market’s reaction to SBP’s decision to raise the policy rate to 16 percent on Friday was the cause of today’s decline. Overall trends appear negative as the benchmark lending rate for consumers and companies, the 6-Month Karachi Inter-Bank Offered Rate (KIBOR), increased by 91 basis points to an all-time high of 16.81 percent.
On the other hand, early morning saw a selling wave in Pakistani stocks, with the leading KSE-100 index falling over 800 points. As street protests against strict COVID-19 curbs in China, the largest crude importer in the world, fueled worries about the outlook for fuel demand, oil prices globally dropped to close to year lows on Monday.
