Amid escalation in geopolitical tension, Pakistan's rupee closed above the 176 level against the US dollar after depreciating 0.27% in the inter-bank market on Tuesday.
As per the State Bank of Pakistan (SBP), the rupee closed at 176.23 after a day-on-day appreciation of 48 paisas or 0.27%. On Monday, the local currency had appreciated 11 paisas against the US dollar.
The drop comes as geopolitical tension took its toll on market sentiment, impacting the Pakistan Stock Exchange (PSX) as well.
During his long-televised speech, Russia President Vladimir Putin recognised two breakaway regions in eastern Ukraine as independent entities on Monday.
The escalating tension between Russia and Ukraine also took a toll on the global economy, as oil prices hit their highest since 2014 on Tuesday, as supply concerns pushed prices to near $100 a barrel.
High oil prices are a major negative for Pakistan, which is a net importer of the commodity.
Talking to Business Recorder, Zafar Paracha, General Secretary Exchange Companies Association of Pakistan (ECAP), said the Russia-Ukraine tension, which involves both the United States and Europe, is a 'hot issue’ in the market.
“The prices of commodities such as oil and gold are going up, whereas there is a lot of uncertainty in the global equity markets, which will not come down until the situation improves,” said Paracha.
On the local front, he said hike in oil prices would take a toll on the country’s import bill.
“We thought that after successful negotiations with the International Monetary Fund (IMF), the pressure on rupee would come down, however, the emergence of this situation is very alarming,” said Paracha.
Inter-bank market rates for dollar on Tuesday
BID Rs 176.15
OFFER Rs 176.25
In the open market, the PKR gained 30 paisas for both buying and selling against USD, closing at 176.50 and 177.50, respectively.
Against Euro, the PKR gained 10 paisas for buying while remaining unchanged for selling, closing at 199 and 201, respectively.
Against UAE Dirham, the PKR remained unchanged for both buying and selling, closing at 48.55 and 49, respectively.
Against Saudi Riyal, the PKR lost 15 paisas for both buying and selling closing, at 46.70 and 47.15, respectively.
Open-market rates for dollar on Tuesday
BID Rs 176.50
OFFER Rs 177.50