Dollar rebounds against rupee on global oil prices surge

KARACHI: The dollar rebounded against the rupee on Thursday as oil prices recorded a surge in the global market, dealers said. The local currency fell 15 paisas to end at Rs176.38 to the dollar from previous day’s closing of Rs176.23 in the interbank foreign exchange market.

The dealers said that the local currency made gains earlier in the day as the dollar fell to Rs176.10 in the intraday trading. However, reports of rising oil prices in the international market escalated the demand for dollars. Brent crude traded around $85 per barrel a day earlier.

Pakistan is the net importer of the petroleum products and any hike in the international prices directly affects the foreign exchange payment.

The oil import bill of the country sharply increased by 112 per cent to $8.38 billion during the first five months of the current fiscal year, as compared with $3.94 billion in the corresponding months of the last fiscal year.

Earlier, the rupee recovered for the two consecutive days owing to the State Bank of Pakistan (SBP) measures to restrict the exporters to realise export proceeds within 120 days instead of 150 days.

The dealers said that the falling foreign exchange reserves are also a big challenge for the rupee stability in the coming days.

The foreign exchange reserves of the country fell by $255 million to $24.019 billion by the week ended December 31, 2021, as compared with $24.274 billion a week ago. The official foreign exchange reserves of the State Bank of Pakistan (SBP) fell by $170 million to $17.686 billion by the week ended December 31, 2021, as compared with $17.856 billion a week ago.

The rupee remained under pressure since the start of the current fiscal year. The local unit fell by Rs18.84 or 11.95 per cent to the dollar from Rs157.54 on June 30, 2021 to the present level of Rs176.38.

In the open market, buying and selling of the dollar was recorded at Rs176.80/Rs178.30 at 3:50pm PST.