Rupee reverses downward slide, gains 0.06%

• Rupee closes at Rs175.67 against the greenback.
• Local currency has depreciated by 11.5% since July 1, 2021.
• Currency was under pressure due to geopolitical tensions.
  

KARACHI: The rupee recovered partially around 0.06% against the US dollar in the inter-bank market on Wednesday.

According to the State Bank of Pakistan (SBP), the local currency closed at Rs175.67 against the greenback, recording a gain of 0.06%.

The currency remained under pressure in the last few days due to geopolitical tensions and global travel reopening. Meanwhile, another major factor behind the pressure was oil prices which are flirting around $100 due to Russia-Ukraine tensions.

With the fresh increase of 0.06%, the Pakistani rupee has depreciated by 11.5% (or Rs18.13) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

The rupee had maintained a downward trend for the past nine months. It has lost 15.36% (or Rs23.4) to date, compared to the record high of Rs152.27 recorded in May 2021.

Earlier, speaking to Geo.tv, Arif Habib Limited's Head of Research Tahir Abbas had said that local currency is under pressure due to two major reasons — geopolitical conditions and rising oil prices.

“Acceleration in international geopolitical tensions over the Ukrainian triggered unrest in the local currency market as the traders fear a decline in exports if Russia invades Ukraine,” he said.

Shedding light on the second reason, he said that the traders also fear an increase in import payments as oil prices in the international market surged to a seven-year high recently.

The analyst was of the view that currency dealers are keeping a close eye on the developments on the aforementioned fronts, predicting the local unit will consolidate on this level in the near term.

On December 29, 2021, the rupee had hit an all-time low of Rs178.24 against the greenback.