KARACHI: The Pakistani rupee ended firmer against the US dollar on Friday.The rupee closed at 279.1 to the dollar in the interbank market, almost unchanged from its close of 279.11 in the previous session.
Dealers anticipate the rupee will remain range-bound in the coming sessions while closely monitoring oil prices amid escalating geopolitical tensions and reports about the likelihood of interest rate increases and exchange rate management.
Chase Securities said in a note that global markets have turned volatile following a sharp escalation in geopolitical tensions, as crude oil prices surged significantly, with US crude jumping over 11 per cent and Brent gaining nearly 8.0 per cent after renewed threats of further attacks on Iran.
“The spike in oil has amplified inflationary concerns globally and weighed on investor sentiment, particularly in emerging markets like Pakistan that remain sensitive to external shocks,” the note said. “On the domestic front, the government has announced a steep increase in petroleum prices, raising petrol and diesel prices by record margins,” it added.
“While a temporary subsidy has been introduced to cushion lower and middle-income groups, the move reflects the government’s commitment to absorb external pressures and align with structural reforms under the IMF programme,” it noted. “Additionally, authorities have provided written assurances to the IMF to maintain a tight monetary stance, including the possibility of interest rate hikes and exchange rate management to counter rising inflation if required.”
