The Pakistani rupee got appreciated by Rs0.06, closing at Rs278.30 against the US dollar in the inter-bank market, on Tuesday. This improvement came on the heels of a significant decline in global oil prices, which reduced the demand for dollars needed for energy imports.
According to data from the State Bank of Pakistan (SBP), the rupee had closed at Rs278.36 against the dollar on Monday.
The drop in oil prices was substantial, with Brent crude falling 3.4% to $78.33 per barrel and the US crude oil benchmark decreasing by 3.7% to $74.17 per barrel in international markets.
Energy imports constitute more than one-fourth of Pakistan’s total imports, amounting to nearly $52 billion in the current fiscal year. This high dependency underscores how fluctuations in energy prices directly impact the country’s economic activities.
Additional support for the rupee came from a significant increase in exports, which reached a three-year high of $2.8 billion in May 2024. This surge in exports increased the supply of foreign currency, potentially leading to a current account surplus for the month, thus easing pressure on the rupee.
This scenario prompted exporters to sell their dollar proceeds on future counters to avoid losses from potential further appreciation of the rupee.
Despite these fluctuations, the currency has remained relatively stable, fluctuating within the range of Rs278-278.50 per dollar over the past several weeks.
Meanwhile, the Exchange Companies Association of Pakistan reported a slight depreciation of Rs0.05 in the open market, with the local currency settling at Rs278.59 per dollar.
