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Rupee’s Gains Come to a Halt Despite Receiving $1.05 Billion on Friday Night

The Pakistani Rupee (PKR) is persisting against the US Dollar (USD) and posted gains in the interbank market today. Although redundant, it gained one paisa against the greenback after hitting an intra-day high of Rs. 174.34 against the USD during today’s open market session.

It appreciated by 0.01 percent against the USD and closed at Rs. 174.47 today after gaining Rs. 1.03 and closing at 174.48 in the interbank market on Friday, 4 February.

The rupee closed in the green against the dollar for the eighth consecutive day after the State Bank of Pakistan (SBP) confirmed in the late hours of Friday that it had received $1.053 billion from the International Monetary Fund (IMF).

However, the ongoing global oil situation is posing a different risk altogether. Bloomberg reported that Saudi Arabia recently raised oil prices for its customers in Asia, the US, and Europe after crude climbed to almost $95 a barrel. State firm Saudi Aramco increased all grades for its main market of Asia in March 2021 and then raised its key Arab Light oil for the region by 60 cents in February 2022 to $2.80 per barrel above its typical benchmark price range.

Saudi Aramco is the world’s biggest oil merchant, and more than 60 percent of its cargo goes to Asia, with China, Japan, South Korea, and India being its biggest customers. Its price shifts often set the tone for other producers in the region and put pressure on struggling economies, with devastating effects.

Discussing the rupee’s near-term outlook earlier in the day, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, acknowledged on Twitter that even though the local unit is stable, volatile oil prices still pose a big threat to it. He added, “With thin Fiscal Space, high inflation & effort to keep I/Rate unchanged, it is a very tough ask to execute & perform & to get remaining $ 3bn IMF loan due to commitment. IMF contract will expire in SEPT/22”.

The PKR continued its good run against the other major currencies and reported gains in the interbank currency market today. It gained 36 paisas against the Canadian Dollar (CAD), 39 paisas against the Australian Dollar (AUD), 51 paisas against the Euro (EUR), and 81 paisas against the Pound Sterling (GBP).

Moreover, it held out against both the Saudi Riyal (SAR) and the UAE Dirham (AED) in today’s interbank currency market.

Source: Pro Pakistani

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