After a gap of two months, Rupee once again crosses Rs177 barrier

• Rupee closes the day at Rs177.11 against US dollar.
• Crosses Rs177 barrier against the greenback after a hiatus of nearly two months.
• Pakistani rupee has depreciated by 12.42% since July 1, 2021.

KARACHI: Amid geopolitical tensions between Russia and Ukraine, the rupee continued to lose ground against foreign currencies as it once again crossed the Rs177 barrier against the US dollar in the inter-bank market on Friday.

According to data released by the State Bank of Pakistan (SBP), with a fresh decline of 0.41%, the local currency closed the day at Rs177.11 against the US dollar in the inter-bank market — after a hiatus of nearly two months.

Currency dealers had expected the rupee to remain range-bound against the dollar this week amid healthy inflows and lack of fresh triggers; however, the Ukraine crisis defied all their expectations.

After posting a fresh decline of 0.41%, the Pakistani rupee has depreciated by 12.42% (or Rs19.57) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

The rupee had maintained a downward trend for the past nine months. It has lost 16.31% (or Rs24.84) to date, compared to the record high of Rs152.27 recorded in May 2021.

Earlier, speaking to Geo.tv, Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq said that the rupee has come under pressure due to the geopolitical situation in Europe and its impact on financial and commodity markets.

“Globally people are moving towards safe-haven assets,” he said, adding that this is the reason why the Pakistani rupee has also been impacted.

Tariq was of the view that the direction of local currency would be driven by geopolitical situation and commodity prices.

Meanwhile, the foreign exchange reserves held by the central bank dropped 1.69% on a weekly basis, according to data released by the SBP on Thursday.

On February 18, the foreign currency reserves held by the SBP were recorded at $16,806.5 million, down $289 million compared with $17,095.8 million on February 11.

Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $23,226 million. Net reserves held by banks amounted to $6,419.5 million.