The Pakistani rupee was trading between Rs222-223 on Wednesday as losses against the US dollar persisted in the early hours of trading.
During intra-day trading, the rupee was quoted at Rs222.49 at roughly 10:30 am, depreciating by Rs1.07 or 0.48 per cent against the US dollar.
The local unit lost for the third session in a row on Tuesday, falling down Rs1.56 or 0.7 per cent against the dollar to close at Rs221.42.
According to analysts, the government’s decision to let the duty-free import of edible commodities to promote food security after floods severely damaged the nation’s agriculture sector has led to a spike in demand for dollars on the local market.
However, the dollar is also strengthening globally. On Wednesday, after U.S. economic data supported the notion that the Federal Reserve will continue with policy tightening, it reached fresh highs against the yen and the Australian and New Zealand dollars.
The US dollar index, which compares the value of the dollar to six important rival currencies, increased 0.08 per cent to Rs110.43, remaining close to the 20-year high set on Tuesday of Rs110.57.
On Wednesday, oil prices, a major factor in determining currency parity, fell more than $1 to their lowest level since before Russia invaded Ukraine as COVID-19 restrictions in the world’s top crude importer China and anticipation of further interest rate increases stoked concerns about a global economic slowdown and a decline in fuel demand.
