Rupee registers minor gain against US dollar

As oil prices stabilised, Pakistan's rupee recorded a minor gain against the US dollar, appreciating 0.04% in the inter-bank market on Wednesday.

As per the State Bank of Pakistan (SBP), the rupee closed at 176.16 after a day-on-day appreciation of 7 paisas or 0.04%. On Tuesday, the local currency had depreciated 48 paisas against the US dollar.

Uncertainty, however, persists in the market amid tensions between Russia and Ukraine, pushing commodity prices upwards in the global market. On Wednesday, oil prices stabilised after hitting seven-year highs in the last session as it became clear the first wave of US and European sanctions on Russia for sending troops into eastern Ukraine would not disrupt oil supplies.

Brent crude rose 11 cents, or 0.01%, to $96.95 a barrel, after soaring as high as $99.50 on Tuesday, the highest since September 2014.

US West Texas Intermediate (WTI) crude futures were up 6 cents, or 0.07%, to $91.97 a barrel, after hitting $96 on Tuesday.

Against USD: Rupee closes at over 176 as Russia-Ukraine tensions escalate

High oil prices are a major negative for the South Asian economy, which is a net importer of the commodity, as it adds to the import bill and widens the current account deficit.

AAH Soomro, former managing director at KASB Securities, warned that in the wake of current geopolitical uncertainty, oil prices are expected to jump up to $100 per barrel, amid sanctions imposed by the West.

“Before it gets too late, oil-importing nations should pre-empt this,” said Soomro, in a series of tweets, warning of another inflationary wave.

Soomro said pressure on energy prices will reverberate across all metals and products while urging the State Bank of Pakistan (SBP) to take proactive measures to combat the upcoming inflationary pressure.

“For Pakistan, the SBP has to act proactively,” said Soomro. “Inflation numbers are going to be high. So would be your import bill. There could be consequences for Rupee if demand for imports remains elevated,” he said.

Inter-bank market rates for dollar on Wednesday

BID Rs 176.10

OFFER Rs 176.20

Open-market movement

In the open market, the PKR lost 20 paisas for buying while gaining 40 paisas for selling against USD, closing at 176.70 and 177.10, respectively.

Against Euro, the PKR lost 10 paisas for buying while remaining unchanged for selling, closing at 199.10 and 201, respectively.

Against UAE Dirham, the PKR gained 5 paisas for both buying and selling, closing at 48.50 and 48.95, respectively.

Against Saudi Riyal, the PKR gained 10 paisas for both buying and selling closing, at 46.60 and 47.05, respectively.

Open-market rates for dollar on Wednesday

BID Rs 176.70

OFFER Rs 177.10