Pakistan’s rupee registered a marginal gain against the US dollar for the second consecutive session, appreciating 0.03% in the inter-bank market on Monday.
As per the State Bank of Pakistan (SBP), the rupee closed at 176.72 after a day-on-day appreciation of five paisas or 0.03%. The rupee had earlier registered a gain of 21 paisas or 0.12% on Friday.
The recovery comes as the government managed to pass the State Bank of Pakistan (SBP) (Amendment) Bill, 2021 in Senate on Friday, its last condition ahead of the board meeting of the International Monetary Fund (IMF).
The IMF Executive Board is scheduled to meet on February 2, and a successful completion of the review would make available SDR 750 million (about $1,059 million), bringing total disbursements under the EFF to about $3,027 million.
“The SBP is faced with a tough situation as it needs another IMF tranche for its external financing needs,” said Asad Rizvi, former country treasury head at Chase Manhattan Bank.
Rizvi opined that the central bank’s tightening approach spells trouble because, in the last quarter of 2021, the market demanded sharply higher yields for government T-bills/bonds and the SBP was forced to take several measures to cool down sentiment.
“In the present scenario it is worrisome for an independent SBP to stay behind the curve. It is a bit of a challenge,” he said.
On the other hand, rising oil prices in the international market amid geopolitical tensions remains a cause of concern for the oil-importing country facing a widening trade gap.
Oil rose more than 1% on Monday to near 7-year highs hit in the previous session, while supply concerns and political tensions in Eastern Europe and the Middle East put prices on track for their biggest monthly gain in almost a year.
Brent crude rose $1.07, or 1.2%, to $91.10 a barrel at 0325 GMT, after adding 69 cents on Friday. The front-month contract for March delivery expires later in the day.
The most-active Brent contract, for April delivery, was trading at $89.51, up 99 cents or 1.1%.
Inter-bank market rates for dollar on Monday
BID Rs 176.55
OFFER Rs 176.65
In the open market, the PKR gained 50 paisas for both buying and selling against USD, closing at 177 and 178, respectively.
Against Euro, the PKR remained unchanged for buying while losing 5 paisas for selling, closing at 198 and 200, respectively.
Against UAE Dirham, the PKR lost 8 paisas for buying and one rupee for selling closing at 49.50 and 50.90, respectively.
Against Saudi Riyal, the PKR gained 10 paisas for buying and 15 paisas for selling, closing at 46.90 and 47.30, respectively.
Open-market rates for dollar on Monday
BID Rs 177
OFFER Rs 178