Rupee depreciates on rising global oil prices

KARACHI: The rupee depreciated 48 paisas against the dollar on Tuesday as the international oil prices rallied near $100 per barrel.

The exchange rate ended at Rs176.23 to the dollar, as compared with Rs175.75 the previous day in the interbank foreign exchange market.

The dealers said that the rising oil prices in the international markets kept the local currency under pressure.

Pakistan is heavily dependent on oil imports to meet its domestic demand. The oil bill of the country surged by 107 per cent to $11.7 billion during the first seven months (July–January) of the current fiscal year, as compared with $5.64 billion in the corresponding months of the last fiscal year.

The rupee was also under pressure due to the scheduled repayments of foreign debts. The foreign exchange reserves have started depleting after showing significant improvement.

The liquid foreign exchange reserves of the country slipped by $231 million to $23.49 billion by the week ended February 11, 2022, as compared with $23.721 billion a week ago.

Similarly, the official reserves of the State Bank of Pakistan (SBP) fell by $241 million to $17.096 billion by the week ended February 11, 2022, as compared with $17.337 billion a week ago.

The rupee remained under pressure since the start of the current fiscal year. The local unit recorded a decline of Rs18.69 of 11.86 per cent from Rs157.54 on June 30, 2021 to the present level of Rs176.23.

The local currency fell to the record low at Rs178.24 against the dollar on December 29, 2021.

At the open market, the buying and selling of the dollar was recorded at Rs176.2 and Rs177.7 at 5:00pm PST.