With slight uptick, rupee stands at 283.61

Dollar demand dips after weakening of global oil prices

KARACHI:

Pakistani currency maintained its uptrend for the second successive day on Wednesday, hitting a new six-week high at slightly above Rs283.50 against the US dollar in the inter-bank market.

It came in the backdrop of a decline in demand for the foreign currency for import payments as energy prices dropped in the international market.

According to State Bank of Pakistan’s (SBP) data, the rupee improved 0.06%, or Rs0.17, and closed at Rs283.61 against the greenback.

Pakistan heavily relies on imported energy to meet domestic demand. Interestingly, the winter season has not only reduced demand for oil imports, but has also prompted the country to export surplus oil.

Fuel consumption in the country dipped after oil-based power plants were shut down owing to low electricity demand while hydroelectric plants, which have no fuel cost, and other low-cost plants met the requirement.

Read Rupee hits 6-week high

Global oil prices, however, ticked up in the evening on Wednesday from a six-month low below $75 a barrel hit a day ago.

The fresh increase in the rupee’s value came after Saudi Arabia’s energy giant Aramco announced plans to invest around $100 million in Pakistan’s retail oil marketing company Gas and Oil Pakistan (GO).

The Saudi company is also expected to acquire stakes in Pakistan’s oil refinery sector and set up a new refinery worth billions of dollars.

Exchange Companies Association of Pakistan (ECAP) reported that the rupee gained 0.08%, or Rs0.25, and settled at Rs284.50/$ in the open market.

Published in The Express Tribune, December 14^th, 2023.

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