Pakistani rupee loses more than Rs3 against US dollar in a single day

WEB DESK: In a significant turn of events, the Pakistani rupee faced substantial losses against the US dollar, depreciating by 1.16 per cent in the inter-bank market on Wednesday.

According to the State Bank of Pakistan (SBP), the rupee settled at Rs280.29 after a notable decrease of Rs3.26 in the inter-bank market.

This downturn marked the end of the rupee’s 28-session appreciation streak, with the currency depreciating by 0.07 per cent on Tuesday, settling at Rs277.03.

Interbank closing #ExchangeRate for todayhttps://t.co/MaQrBcTLrz#SBPExchangeRate pic.twitter.com/vzQmy6TCsN

— SBP (@StateBank_Pak) October 18, 2023

In a related development, data released by the Pakistan Bureau of Statistics (PBS) revealed a positive note in the form of 2.52 per cent year-on-year growth in large-scale manufacturing (LSM), a significant improvement after 11 months.

The decline in the rupee’s value was attributed to higher demand for dollars to facilitate upcoming foreign payments. The experts are labelling the earlier increase in the US dollar’s value as ‘artificial.’

Internationally, the US dollar maintained its position on Wednesday, despite challenges in making further headway.

This was observed even in the face of robust US retail sales data, as traders shifted their focus to imminent Chinese growth figures and the escalating violence in the Middle East.

Read more: Pakistan stock market surges past 50,000 points after six-year hiatus

It’s worth noting that the benchmark 10-year Treasury yield has increased by approximately 100 basis points since mid-July, and the dollar index has surged by 7 per cent in the same period.

Furthermore, oil prices, a crucial indicator of currency parity, experienced a surge on Wednesday. This escalation followed a tragic incident at a Gaza hospital, resulting in hundreds of casualties.

The event raised concerns about potential disruptions in oil supply from the region, contributing to the rise in oil prices.