KARACHI: The rupee was little changed against the dollar in the interbank market on Friday.The rupee closed at 279.31 per dollar, inching up from its close at 279.32 in the previous session. Similarly, the local currency edged higher in the open market. It ended at 280.36 against the dollar, compared with 280.37 on Thursday.
Dealers said the rupee remained stable due to a persistent rise in foreign exchange reserves.The forex reserves held by the State Bank of Pakistan (SBP) rose by $41 million to $16.341 billion as of March 6. The country’s total liquid foreign reserves increased by $164 million to $21.598 billion. The reserves of commercial banks also rose by $123 million to $5.257 billion.
However, soaring oil prices due to the ongoing conflict in the Middle East raise concerns about Pakistan’s inflation and the outlook for its external sector.Oil prices have climbed back to around $100 a barrel, reviving concerns about the potential impact on Pakistan’s inflation outlook and fiscal position, said Chase Securities in a note.
“With the weekly domestic fuel price adjustment due tonight, market participants are closely monitoring the likely increase in petroleum prices and its broader implications for inflation and interest rate expectations,” it said.
“Despite these concerns, the government has moved swiftly to contain potential fiscal pressures, while efforts are underway by the US and EU to keep energy costs manageable, including allowing the temporary purchase of Russian oil,” it added.
