Due to a decrease in the price of crude oil, the rupee appreciated versus the dollar by 11 paisas on Monday.
From last Friday’s close of Rs175.86 in the interbank foreign currency market, the exchange rate finished at Rs175.75 to the dollar on Monday.
According to the dealers, news of prospective Russian-Ukrainian diplomatic discussions has lowered oil prices on the international market.
In order to keep up with local demand, Pakistan is one of the largest importers of petroleum products.
During the first seven months of the current fiscal year (July–January), the country’s oil bill increased by 107% to $11.7 billion, compared to $5.64 billion in the comparable months of the previous fiscal year.
On Washington Day, a federal holiday in the United States, dollar clearances were halted, traders claimed. Interbank trade has been conducted in anticipation of payment.
Depletion of foreign currency reserves is a problem for rupee stability, they warned.
On February 11, 2022, the country’s liquid foreign currency reserves fell by $231 million to $23.49 billion from $23.721 billion the previous week. As a result, the official reserves of Pakistan’s State Bank (SBP) decreased by $241 million to $17.096 billion on the week ending February 11, 2022, down from $17.337 billion just a week earlier.
Ever since the beginning of the current fiscal year, the rupee has been weakening against the US dollar. On June 30, 2021, the local unit was trading at Rs157.54, down 11.60 percent to Rs175.75.
On December 29, 2021, the rupee hit a historic low against the US dollar, falling to Rs178.24.
There was a trading volume of Rs176.3 and Rs177.8 on the open market, respectively.