Rupee slipped 0.13 percent (-23 paisas) against the US dollar last week despite recent inflows from the International Monetary Fund.
The rupee slipped from 174.48 to 174.71 against the American currency in the interbank market last week after registering a strong recovery in the pre-ceding week. The local unit has appreciated by Rs1.80 during the current year 2022 while it has devalued by Rs17.28 during the ongoing fiscal year 2021-22.
On the other hand, inflation in the US climbed to its highest level in 40 years in January, with prices rising by 7.5pc from a year ago. The Federal Re-serve has signalled that it intends to raise interest rates by 50bps at its meeting in March in an effort to dampen spending and bring down prices. This has supported the dollar index to climb 0.28 percent up at 95.85.
Moreover, surging crude oil and commodity prices globally amid Russia-Ukraine tension, which have rattled the financial and equity markets across the globe, may also keep the rupee under pressure.
The rupee started last week on strong footing and remained almost firm on the first two days. It appre-ciated by one paisa on Monday and depreciated by three paisas on Tuesday. The local currency came under pressure on Wednesday and shed 39 paisas (-0.22 percent). The lowest level of the rupee against the dollar during the week under review was re-corded at 174.89 on Wednesday.
However, the rupee remained firm for the next two days and gained two paisas on Thursday and 16 paisas on Friday, which eroded most of the losses of the week.
The rupee’s depreciation, albeit marginal, was against the market’s expectation after receiving $1 billion each recently from the International Mone-tary Fund (IMF) and international sukuk. The net reserves with the State Bank of Pakistan (SBP) have surged to $17.34 billion; however, they are still below the December 2021 level of $17.69 billion due to higher imports.— TLTP
