Rupee Makes Big Gains Against US Dollar Despite Highest Oil Price in Over 2 Months

The Pakistani Rupee (PKR) continued to recover against the US Dollar (USD) and posted gains in the interbank market today.

It appreciated by 0.30 percent against the USD and closed at Rs. 198.46 after gaining 60 paisas in the interbank market today. The local unit hit an intra-day low of Rs. 198.72 against the USD during today’s open market session.

From its record-breaking peak of 202.01 against the rupee, the greenback is down by Rs. 3.55 since the coalition government increased petroleum prices last week.

The rupee closed in green against the dollar for the third consecutive day despite skyrocketing oil prices in the international markets. Oil prices surpassed $120 for the first time in more than two months after European Union (EU) leaders decided to cut Russian oil imports, international news outlets reported on Tuesday.

Global crude markets panicked during the early hours of the day, hitting their highest in more than two months. Brent crude stayed above $123 after briefly peaking at $124.10, its highest since 9 March 2022. The US West Texas Intermediate (WTI) crude rose as high as $119.85 per barrel before settling down at $118.5.

In terms of developments assisting the resurgent rupee, markets embraced reports that the International Monetary Fund (IMF) and Pakistan today are resuming their technical discussion on the upcoming fiscal year’s budget. The IMF mentioned in a handout last week that its team looks forward to continuing its dialogue and close engagement with the Government of Pakistan on policies to ensure macroeconomic stability for the benefit of all of Pakistan’s citizens.

The PKR recovery also continued against the other major currencies in the interbank market today. It gained 15 paisas against the Saudi Riyal (SAR), 16 paisas against the UAE Dirham (AED), Rs. 1.06 against the Euro (EUR), and Rs. 1.11 against the Pound Sterling (GBP).

Moreover, it gained 24 paisas against the Canadian Dollar (CAD) and 31 paisas against the Australian Dollar (AUD) in today’s interbank currency market.