PKR slides 23 paisas to dollar on Russia-Ukraine war

PKR slides 23 paisas to dollar on Russia-Ukraine war

KARACHI: The Pakistan Rupee (PKR) witnessed a decline of 23 paisas against the US Dollar on Thursday, succumbing to the pressures of soaring international oil prices triggered by Russia’s military actions in Ukraine.

Closing at Rs176.39 against the dollar, the rupee slid from the previous day’s closing rate of Rs176.16 in the interbank foreign exchange market.

Experts in the currency market attribute this decline to the global surge in oil prices, which breached the $100 per barrel mark for the first time in seven years following Russia’s invasion of Ukraine.

Pakistan, being a net importer of petroleum products, finds itself particularly vulnerable to fluctuations in oil prices, as it necessitates significant foreign exchange reserves to finance its energy imports.

The oil bill of the country has skyrocketed by 107 per cent to $11.7 billion during the first seven months (July – January) of the ongoing fiscal year compared to $5.64 billion in the corresponding period of the previous fiscal year.

Analysts further point out that the scheduled repayments of the government for foreign debts have added to the pressure on the rupee, exacerbating its downward trajectory.

The nation’s liquid foreign exchange reserves have also experienced a dip, falling by $231 million to $23.49 billion by the week ending February 11, 2022, compared to $23.721 billion a week earlier. Similarly, the official reserves of the State Bank of Pakistan (SBP) have decreased by $241 million to $17.096 billion during the same period, down from $17.337 billion previously.

The geopolitical tensions surrounding the Russia-Ukraine conflict have sent shockwaves through global financial markets, with currencies of emerging economies like Pakistan bearing the brunt of the uncertainty.

The situation calls for cautious monitoring by Pakistani authorities as they navigate the challenges posed by the escalating crisis and its implications on the country’s economy.

As the world watches developments unfold in Eastern Europe, Pakistan finds itself grappling with the economic fallout of events thousands of miles away, underlining the interconnectedness of global markets and the vulnerability of emerging economies to external shocks.