Riding a seesaw journey in the interbank market, the Pakistani rupee (PKR) managed to hold its ground in a second consecutive session against US dollar, appreciating 0.16% on Thursday.

As per the State Bank of Pakistan (SBP), the rupee closed at 175.39 after a day-on-day appreciation of 28 paisas or 0.16%. On Wednesday, the Pakistani currency had registered a gain of 0.06%.

The currency's strength comes as oil prices stopped their upwards surge after geopolitical volatility pushed crude well above $90 per barrel, adding to the concern of oil-importing countries like Pakistan, which already battles a widening current account deficit and shortage of foreign exchange reserves.

On Thursday, Brent crude traded down $1.26, or 1.3%, at $93.55 a barrel by 0914 GMT. US West Texas Intermediate (WTI) crude was down $1.34, or 1.4%, at $92.32.

“Oil prices are already too high due to geopolitical escalation,” Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company (Private) Limited, told Business Recorder.

"It may take 3-4 months for the pressure to subside. However, if tensions escalate further, oil could cross the $100 level as well.”

Meanwhile, the SBP, in its bid to improve foreign exchange inflows in the inter-bank market, facilitate exporters and encourage timely inflow of export proceeds, decided to enhance the scope of Export Finance Scheme (EFS) - both conventional as well as Shariah-based. This allows exporters to obtain financing against their proceeds through discounting of export bills/receivables.

“This initiative will help exporters meet their working capital needs and also incentivise them to bring in their export proceeds in a timely manner that will help to improve foreign exchange inflows in the inter-bank market,” said the SBP.

Inter-bank market rates for dollar on Thursday

BID Rs 175.30

OFFER Rs 175.40

Open-market movement

In the open market, the PKR gained 40 paisas for both buying and selling against USD, closing at 176.30 and 177.30, respectively.

Against Euro, the PKR remained unchanged for both buying and selling, closing at 199 and 201, respectively.

Against UAE Dirham, the PKR gained 20 paisas for both buying and selling, closing at 48.60 and 49.05, respectively.

Against Saudi Riyal, the PKR gained 5 paisas for both buying and selling closing, at 46.65 and 47.10, respectively.

Open-market rates for dollar on Thursday

BID Rs 176.30

OFFER Rs 177.30

This story was first published in Business Recorder on February 17, 2022.