PKR sheds 36 paisas versus $ for 3rd session

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KARACHI: Pakistani rupee depreciated by 36 paisas (-0.20 percent) against the US dollar for the third straight session on Monday as commodity prices surged globally on the back of Russia-Ukraine conflict.
The State Bank of Pakistan said in a statement that the dollar opened at Rs177.11 in the interbank market and closed at Rs177.47. The rupee witnessed a trading range of 49 paisas during the session, showing the intraday high bid of 177.55 and low offer of 177.30. Within the open market, the rupee was traded unchanged at 177.50/178.50 per dollar.
On the other hand, the US Dollar Index (DXY), which gauges the greenback against a basket of its main competitors, traded at 97.15 neighbourhood, as a broad risk-aversion wave helped the USD start the week on a strong footing in the Asian session. The index rose to the eight-month high in the last week as sour sentiment pushed traders towards the traditional risk-safety.
Overall, the rupee shed Rs1.25 against the American currency last week, while depreciation remained 75 paisas in February. The local unit devalued by Rs20.04 during the ongoing fiscal year 2021-22 and 96 paisas during the current year 2022.
The currency dealers said that the surging trend in the global crude oil prices will keep the rupee under pressure, as the deteriorating situation between Russia and Ukraine has badly hit the currency markets. They said the rupee is bearing the brunt of increasing trade deficit, surging import bill due to rise in oil prices, shrinking reserves, and speculative elements. The oil import bill recorded a sharp increase in the first seven months (July-January) of 2021-22 from a year ago owing to rising prices on the international market and massive depreciation of the rupee. The oil import bill surged 107.35 percent to $11.7 billion in the first seven months of the current fiscal year.
Moreover, the decline in the value of PKR is also attributable to the deteriorating current account balance owing to the increase in imports as the current account deficit (CAD) rose to $2.6 billion in January 2022 from $1.9bn in December 2021. In addition, the shrinking foreign exchange reserves have also played their due role to put pressure on the local unit as the total liquid foreign exchange reserves dropped to $23.23 billion. – TLTP