Rupee-drops-to-record-low-of-Rs1708-against-USD-The-Correspondent

Pakistani rupee registered back-to-back losses against the US dollar and depreciated 0.37% in the interbank trade on Thursday.

As per the State Bank of Pakistan (SBP), the rupee closed at 221.50 after a fall of Re0.82. Since October 13, the rupee has decreased by Rs3.12 or 1.4% against the US dollar.

On Wednesday, Pakistan’s rupee had reverted to its old ways, and closed at 220.68 after depreciating Re0.95 or 0.43%.

Experts attributed the rupee’s decline to political uncertainty after Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan on Tuesday announced to start a ‘long march’ from Lahore to Islamabad on Friday (October 28), causing negative sentiment among market players.

In another key development, the Asian Development Bank (ADB) on Wednesday released $1.5 billion for Pakistan to support the economy and rehabilitate the affected people in the wake of recent floods.

“The SBP has received $1.5 billion from ADB in value 26 October 2022 as disbursement of policy-based loan for the Government of Pakistan. These proceeds have increased the FX reserves of SBP and will be reflected in the reserves for the week ending 28 October 2022,” the central bank said in a tweet on Thursday.

Internationally, the dollar retreated on Thursday as market expectations mounted that the Federal Reserve will tone down its aggressive stance on interest rate hikes, pushing the euro further above parity and lifting its other major peers to multi-week highs.

Looking ahead to next week’s Federal Open Market Committee (FOMC) meeting, markets are expecting another 75 basis point hike, although sentiment is building that the Fed will opt for a smaller increase in December.

Against a basket of currencies, the US dollar index was up 0.06% at 109.63, following a 1.1% fall overnight.

Oil prices, a key determinant of currency parity, steadied on Thursday following a rally of nearly 3% in the previous session, as concern over slack demand in China balanced optimism from record US crude exports and sign that recession concerns are abating.

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