US Dollar

The currency skidded by more than a cent against the dollar to below $1.10 after the Bank's governor insisted the 65 billion pound scheme to purchase UK government bonds would not be continued beyond the deadline on Friday, The Guardian reported.

Friday was the 11th consecutive working day for the Pakistan rupee when it maintained the winning streak since the current Finance Minister Ishaq Dar announced his return to to the country by ending a five-year self-exile last month. Apparently, after taking over, Dar resumed his old policy of protecting the rupee against the onslaught of the US dollar.

Rupee had closed at 81.89 on Thursday.It was trading at 82.30 against the dollar in the morning after opening at 82.19 a dollar. Later, it touched an all-time low of 82.33 against the dollar. The all-time low plunge in the rupee has come a day after the World Bank had on Thursday cut India's growth forecast for this financial year by a full percentage point amid rising inflation and adverse geo-political conditions.

The rupee opened at Rs 81.52 on Thursday at the interbank forex market and then went down to Rs 81.94. Experts said demand for dollars from oil importers resulted in a fall in rupee. The oil prices are expected to climb up as the producing nations have announced their plans to cut production.

The increase in crude prices hit the Indian rupee as the country meets bulk of its oil needs through imports. Further the Indian stock markets too fell on Monday. The Reserve Bank of India (RBI) does not have any fixed dollar: rupee exchange rate and its market interventions is to curb excessive volatility, Governor Shaktikanta Das said recently.

The strong dollar environment has raised questions about how Asia will be impacted and whether this will precipitate another financial crisis. "We think this is a very different cycle for Asia - very unlike 1997/98 or 2013", Morgan Stanley said.

According to Morgan Stanley, currencies across Asia are depreciating because of a stronger dollar environment and not because of any existing imbalances related to the Asia macro situation.Indeed, this is best reflected by the fact that trade weighted exchange rates in the region have been relatively stable to appreciating.

In September, a month where the dollar briefly touched its highest level since 2002, the dollar index rose 3.2 per cent, marking its best month since April, when it rose 4.73 per cent. Thanks to its strong gains during the first nine months of the year, the dollar could be on track for its best annual performance since 2014, when the dollar index rose nearly 13 , MarketWatch reported.

US dollar-denominated debt remained the largest component of India's external debt, with a share of 54.7 per cent at end-June 2022, followed by debt denominated in the Indian rupee (30.4 per cent), SDR or special drawing rights (6.3 per cent), yen (5.1 per cent), and euro (2.8 per cent).

On Friday, the pound tumbled more than 3 per cent and traded below $1.10, reaching its lowest level since 1985, reports Xinhua news agency. The big sell-off came after Chancellor Kwasi Kwarteng had earlier in the day unveiled his ambitious plan to cut taxes and boost economic growth.