KARACHI: As global crude oil prices climbed, the Pakistani rupee fell for the third day in a row versus the dollar.
In the interbank foreign currency market, the rupee fell 26 paisas to Rs176.98 versus the dollar on Wednesday, after closing at Rs176.72 on Tuesday.
The increase in worldwide oil prices, according to traders, boosted dollar demand. During the day on Wednesday, the benchmark Brent oil was trading at $87.80 a barrel.
To fulfill local energy needs, Pakistan is a net importer of petroleum products. The country’s oil bill climbed by 113.39 percent to $10.18 billion in the first half of the fiscal year 2021/22, compared to $4.77 billion in the previous fiscal year’s first half.
Due to import limits imposed by the Finance (Supplementary) Bill, 2021, traders said the market was hopeful about the rupee’s resilience in the coming days.
However, the recent increase in dollar demand as a result of increased worldwide oil prices has negated the State Bank of Pakistan’s (SBP) limitations on realizing export proceeds.
On January 5, 2022, the central bank instructed exporters to materialize their export proceeds within 120 days, rather than the prior 150 days.
As Pakistan is a net importer of petroleum goods to fulfil local energy needs, increasing oil prices may weaken the rupee in the coming days.
Due to greater foreign payments, the local currency has been under pressure since the start of the current fiscal year. The currency declined by Rs19.44, or 12.33 percent, from Rs157.54 to Rs176.98 on January 26, 2022, down from Rs157.54 on June 30, 2021.