Pakistan's rupee ended the week lower against the US dollar, depreciating 0.27% in the inter-bank market on Friday.
As per the State Bank of Pakistan (SBP), the rupee closed at 175.86 after a day-on-day depreciation of 47 paisas or 0.27%.
The decline in local currency comes as oil prices remained high amid geopolitical volatility, pushing crude well above $90 per barrel. Oil prices retreated on Friday as the prospect of extra supply from Iran returning to the market outweighed fears of a possible Russian invasion of Ukraine, which could disrupt supply.
Rupee posts further recovery against US dollar
However, despite the drop, Brent crude futures traded at $92.29 a barrel, while US West Texas Intermediate (WTI) crude futures shed 67 cents, or 0.7%, to $91.09 a barrel.
A rising import bill amid surge in oil prices is also taking a toll on the country’s exchange reserves, which recorded a decline of $231 million during the last week, said Asad Rizvi, former treasury head at Chase Manhattan.
"Despite recent inflows, pressure has not subsided due to higher import bill. Surging oil prices is adding to the woes in shape of Rs/$ mismatch that has created a gap, keeping the rupee under pressure,” said Asad Rizvi.
According to the SBP weekly report, total liquid foreign exchange reserves held by the country stood at $23.49 billion as of February 11, 2022 compared to $23.72 billion.
Inter-bank market rates for dollar on Friday
BID Rs 175.80
OFFER Rs 175.90
Open-market movement
In the open market, the PKR lost 20 paisas for both buying and selling against USD, closing at 176.50 and 177.50, 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 lost 2 paisas for buying and 5 paisas for selling, closing at 48.62 and 49.10, respectively.
Against Saudi Riyal, the PKR gained 5 paisas for both buying and selling, closing at 46.60 and 47.05, respectively.
Open-market rates for dollar on Friday
BID Rs 176.50
OFFER Rs 177.50