Rupee recovers 7 paisas on easing oil prices

KARACHI: The rupee recovered 7 paisas against the dollar on Wednesday as the international oil prices recorded a decline.

The exchange rate ended at Rs176.16 to the dollar, as compared with Rs176.23 the previous day in the interbank foreign exchange market.

The dealers said that the declining trend in the global crude oil prices helped the local currency to show some gains.

However, the foreign exchange reserves have started depleting after showing significant improvement, along with the rising oil prices which is a major contributor to the import bill of the country.

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 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 Rs18.61 of 11.81 per cent from Rs157.54 on June 30, 2021 to the present level of Rs176.15.

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 Rs176.3 and Rs177.3 at 3:30pm PST.