After three days of losses, Pakistan's rupee ended the week with a gain against the US dollar, appreciating 0.14% in the inter-bank market on Friday.
As per the State Bank of Pakistan (SBP), the rupee closed at 176.24 after a day-on-day appreciation of 25 paisas or 0.14%. The gain comes after the currency registered a fall of 0.15% on Thursday, 0.02% on Wednesday, and another drop of 0.15% on Tuesday.
Rupee falls for third consecutive session against US dollar
The currency has now appreciated over 1.1% since it hit its all-time low of Rs178.24 on December 29, 2021.
The latest gain comes as oil prices lost their steam on Friday, after rising to seven-year highs this week, owing to unexpected rise in U.S. crude and fuel inventories and as investors took profits.
Brent crude futures were down $1.49, or 1.6%, to $86.89 a barrel. The contract earlier fell by as much as 3%, the most since December 20. A day earlier the global benchmark touched fresh 7-year highs of $89.50 a barrel.
Oil prices are closely linked to sentiment around the currency as expensive imports contribute to deterioration in Pakistan's current account, putting pressure on the rupee.
Meanwhile, the monetary policy committee of SBP will convene on January 24, 2022 to announce the monetary policy for the next two months.
Arif Habib Limited, in its latest report, said that it expects the central bank to maintain the policy rate unchanged.
Majority expects status quo in State Bank's upcoming MPC meeting
“Rising inflation is being witnessed across the globe," it said. "Consequently, we have seen central banks in the regional markets reacting to the surging consumer prices pressured by global supply-chain disruptions, costlier energy and food supplies.
"However, with rising cases of COVID (Omicron) variant globally, there are concerns to the overall economic recoveries across different regions including Pakistan.”
It added that, going forward, the trade deficit should take a breather as soon as the international commodity prices start receding.
"For now, however, increase in deficit of trade balance caused by rising imports as well is fueling domestic inflation level on the back of imported inflation."
Inter-bank market rates for dollar on Friday
BID Rs 176.20
OFFER Rs 176.30
Open-market movement
In the open market, the PKR lost 80 paisas for both buying and selling against USD, closing at 178.30 and 179.30, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 199.50 and 201.45, respectively.
Against UAE Dirham, the PKR lost 10 paisas for both buying and selling, closing at 48.72 and 49.20, respectively.
Against Saudi Riyal, the PKR lost 10 paisas for both buying and selling as well, closing at 46.75 and 47.20, respectively.
Open-market rates for dollar on Friday
BID Rs 178.30
OFFER Rs 179.30