Rupee recovers for second straight day after SBP measures

KARACHI: The rupee recovered against the dollar for the second straight day on Wednesday as it ended at Rs176.23 in the interbank foreign exchange market.

The rupee recovered 45 paisas during the past two days, to end at Rs176.23 to the dollar from previous day’s closing of Rs176.63 in the interbank market.

The dealers said that the measures taken by the State Bank of Pakistan (SBP) to reduce the days for realising export receipts helped the local currency to recover.

The central bank on January 5, 2022 directed the exporters to realise their export receipts within 120 days from the date of shipment instead of 150 days.

The dealers, however, expressed concerns over rising international oil prices. The oil prices have surged two- month high to $84/barrel.

Pakistan is a net importer of petroleum products to meet domestic demand. 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.

Furthermore, the falling foreign exchange reserves are also a big challenge for 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 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 gained Rs2.01 since falling to the all-time low of Rs178.24 against the dollar on December 29, 2021.

In the open market, buying and selling of the dollar was recorded at Rs177.20/Rs178.80 at 3:50pm PST.