After four straight days of losing value, Pakistan rupee finally reversed its trajectory and registered a marginal 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 186.70 after a day-on-day appreciation of 27 paisas, or 0.14%. However, the currency has still lost 2.76% of its value this week.
The local currency has depreciated over 17% against the dollar since achieving its most-recent high on May 14, 2021, and by over 14% during the ongoing fiscal year.
Oil price, a major determinant of currency parity, slipped on Friday burdened by the prospect of weaker global growth, higher interest rate and COVID-19 lockdowns in China hurting demand even as the European Union considered a ban on Russian oil that would further tighten supply.
Brent crude was down 76 cents, or 0.7%, at $107.57 a barrel, while U.S. West Texas Intermediate (WTI) crude declined 32 cents, or 0.3%, to $103.47.
Rupee closes near 187 after fourth straight loss against US dollar
“The improvement in rupee value comes after an intervention from the central bank,” Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP), told Business Recorder.
Paracha said the rupee hit 188 during the day, but an improvement was seen after “SBP intervention”.
The rupee has been under pressure over the International Monetary Fund (IMF) programme, seen widely as crucial to bringing stability to Pakistan’s markets. Pakistan is currently in talks with the IMF for revival of its $6-billion Extended Fund Facility (EFF), a programme that was put on hold with the change in government.
“We hope that the meeting with the IMF brings positive news, as oil prices are too high, and there is pressure on the balance of payments,” said Paracha.