As per the State Bank of Pakistan (SBP), the rupee closed at 176.98. The flat line comes after the rupee depreciated 0.14%, 0.13% and 0.15% against the US dollar on Monday, Tuesday and Wednesday, respectively.

The stabilisation comes as oil prices after days of surge recorded a slight fall on Thursday as the US dollar strengthened following signs that the US Federal Reserve will tighten monetary policy in the world's biggest oil user.

Rupee falls for third consecutive session against US dollar

Brent crude futures were down 57 cents, or 0.9%, to $89.18 a barrel, after earlier falling by as much as 1.1% to $89. Brent climbed 2% on Wednesday.

US West Texas Intermediate (WTI) crude futures were down 83 cents, or 0.9%, to $86.52 a barrel, after falling by as much as 1.2% to $86.34. WTI gained 2% in the previous session.

Oil prices are directly related to sentiment around the currency as expensive imports widen Pakistan's current account adding pressure on rupee.

Internationally, the dollar climbed to multi-week highs against other major currencies on Thursday, bolstered by the prospects for faster and larger interest rate hikes in the months ahead.

The dollar index held at its highest levels since mid-December, while the euro languished at two-month lows of $1.11930. The greenback also hit its highest level in more than a year against the New Zealand dollar and a seven-week peak against Australia's currency.

This report was first published in Business Recorder on Jan 27, 2022.