Pakistani currency on Tuesday ticked up Rs0.06 and closed at Rs278.30 against the US dollar in the inter-bank market as gains came in the wake of a notable fall in global oil prices, which reduced demand for the greenback for energy imports.
According to the State Bank of Pakistan (SBP)’s data, the rupee had closed at Rs278.36 against the dollar on Monday.
Brent crude price decreased 3.4% to $78.33 per barrel while the US crude oil benchmark fell 3.7% to $74.17/barrel in international markets.
The share of energy imports is high at over one-fourth in Pakistan’s total imports of nearly $52 billion in the current fiscal year, indicating how energy prices impact economic activities in the country.
Further support to the rupee came from the jump in exports to a three-year high at $2.8 billion in May 2024, which increased supply of the foreign currency. It may lead to a current account surplus in May, easing pressure on the rupee.
The development apparently forced exporters to sell their dollar proceeds on future counters to avoid losses in the event of further rupee appreciation.
In any case, the currency has largely remained stable as it continued to move in the range of Rs278-278.50/$ over the past several weeks.
Exchange Companies Association of Pakistan, however, reported that the local currency ticked down Rs0.05 and settled at Rs278.59/$ in the open market.
Published in The Express Tribune, June 5th, 2024.
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