Rupee shuns trend, up by 57 paisa in early trading on Tuesday

Breaking the recent trend of continuous losses against the US dollar, the Pakistan rupee closed trading at Rs223.42 after a 24-paisa gain in interbank exchange on Tuesday.

At one stage, the rupee was up by 57 paisa or 0.26 percent in interbank and was available at Rs223.09 after closing at Rs223.66 on Monday.

On the other hand, the exchange rate for US dollar in open market was Rs231.15 against the previous day’s value of Rs231, representing an increase of 15 paisa, during early trading.

According to the State Bank data, the rupee has cumulatively decreased by 1.01 percent (or Rs2.24) in the previous seven working days, compared to the November 10 level of Rs221.42.

Moreover, there is a huge difference between the interbank and open market rates, as experts say uncertainty over the ninth review by IMF, growing risk of defaulting on its obligations to repay foreign debt despite Finance Minister Ishaq Dar’s reassurance, and absence of a timeframe regarding incoming financing from Saudi Arabia and China are the factors contributing to this trend.

Globally, the US dollar was firmly higher against major currencies on Monday, as rising Covid-19 cases in China led to new restrictions and weighed on global investor sentiment.

The dollar was up 0.5 percent against Japan’s yen at 141.07, its highest since November 11. Meanwhile, the euro was 0.62 percent lower against the greenback at $1.026.

On the other hand, the dollar index, which tracks the currency against major peers, has slid more than 6 percent from a 20-year high in October. Last month, a fall in the US inflation rate has driven bets that the US Federal Reserve will slow down its interest rate hikes.

It may be recalled that Dar had promised repeatedly that the dollar would soon be available at Rs200 as the actual value was much lower than that. But after some positive signs, the dollar again started gaining value against the local currency. 

During the past week, oil prices in international markets dropped more than 6 percent as global recession worries and concerns about China’s rising COVID-19 cases dented the demand.

Brent crude futures decreased by $5.93 to $87.93 and the US West Texas Intermediate (WTI) by $7.19 to $79.73 a barrel in a week time.

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