Rupee continues recovery for second straight day

KARACHI: The rupee gained 28 paisas against the dollar on Thursday as the international oil prices continued to decline.

The exchange rate ended at Rs175.39 to the dollar from the previous day’s closing of Rs175.67 in the interbank foreign exchange market.

The dealers said that the global oil prices witnessed a continuous decline due to the ease in the Russian-Ukraine tensions and progress in the Iran-US nuclear talks. The benchmark Brent crude was trading at $93.58 a barrel by 3:40 PST.

Pakistan is dependent on the import of petroleum products to meet domestic demand.

The oil import bill surged 107 per cent to $11.7 billion during the first seven months (July–January) 2021/22, as compared with $5.64 billion during the same period of the last fiscal year.

However, external inflows have supported the rupee to some extent. The State Bank of Pakistan (SBP) recently received over one billion dollars from the International Monetary Fund (IMF) and another one billion dollars under Sukuk proceeds, which helped the central bank to strengthen the foreign exchange reserves.

The total liquid foreign exchange reserves of the country increased $1.637 billion to $23.721 billion by the week ended February 4, 2022, as against $22.084 billion by the week ended January 28, 2022.

The official reserves of the State Bank climbed up $1.61 billion to $17.337 billion by the week ended February 4, 2022, as compared with $15.727 billion a week ago.

The local currency remained under pressure since the start of the current fiscal year. The rupee lost Rs17.85 or 11.33 per cent against the dollar from Rs157.54 on June 30, 2021 to the present level of Rs175.39.

At the open market, the buying and selling of the dollar was recorded at Rs176 and Rs177.6 at 4:00pm PST.