Pakistan's rupee broke its losing streak against the US dollar, appreciating marginally by 0.06% in the inter-bank market on Wednesday.
As per the State Bank of Pakistan (SBP), the rupee closed at 175.67 after a day-on-day appreciation of 11 paisas or 0.06%. The Pakistani currency had been losing value for the past two sessions, depreciating 0.43% and 0.18% on Monday and Tuesday, respectively.
The reversal comes as oil prices eased a bit in the global market after escalation of tension between Russia and Ukraine triggered geopolitical uncertainty that pushed prices of the commodity above $95 per barrel.
Rupee suffers back-to-back losses against US dollar
However, prices steadied on Wednesday after retreating more than 3% in the previous session as investors gauged the impact of easing Russia-Ukraine tension against a taut balance between tight global supplies and recovering fuel demand.
“The minor impact on the parity rate comes as the situation cools off between Russia and Ukraine,” said Abdullah Umer, research analyst at Ismail Iqbal Securities Limited.
“However, the situation has eased off only partially, as one has to wait till February 20, after the conclusion of joint drills being conducted by Russia and Belarus. If Russian troops return after the drills the escalation would be considered as cooling off. But till then the oil price will remain above $90 per barrel,” said Umer.
On the other hand, the federal government on Tuesday announced a massive increase of Rs12.03 per litre in the prices of petroleum products with effect from February 16.
The development came as the government opted to pass on the full impact of Brent oil surge in the international market to mitigate the fortnightly revenue loss of around Rs35 billion.
“The latest government hike is linked to jump in international oil price, and will increase the trade deficit and inflation. It will also create expectations of changes in the monetary policy,” added Umer.
Inter-bank market rates for dollar on Wednesday
BID Rs 175.55
OFFER Rs 175.65
Open-market movement
In the open market, the PKR gained 30 paisas for both buying and selling against USD, closing at 176.70 and 177.70, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 199 and 201, respectively.
Against UAE Dirham, the PKR gained 5 paisas for both buying and selling, closing at 48.80 and 49.25, respectively.
Against Saudi Riyal, the PKR gained 5 paisas for both buying and selling closing, at 46.70 and 47.15, respectively.
Open-market rates for dollar on Wednesday
BID Rs 176.70
OFFER Rs 177.70