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Wednesday May 29, 2024

Rupee falls for second day

the rupee ended at 278.29 to the US dollar, compared with 278.12 in the previous session

By Our Correspondent
April 17, 2024
A man holds both Pakistani rupees and the US dollar. — PPI/File
A man holds both Pakistani rupees and the US dollar. — PPI/File

KARACHI: The rupee continued to fall for the second straight day on Tuesday amid concerns about diminishing foreign exchange reserves and uncertainty in the Middle East.

In the interbank market, the rupee ended at 278.29 to the US dollar, compared with 278.12 in the previous session. It fell by 0.06 percent during the session. The rupee edged lower in the open market. It was trading at 279.68, down from 279.66 on Monday. Analysts said the forex reserves numbers released by the State Bank of Pakistan on Monday showed its reserves are stable at $8 billion. The reserves could, however, fall to $7 billion following the recent $1 billion Eurobond payment.

Until the nation receives the final $1.1 billion tranche from the International Monetary Fund—which is anticipated to be released following the board meeting of the global lender later this month—the reserves are probably going to remain under strain, said an analyst.

The global oil prices fell for a second day on Tuesday as worries about supply disruptions and the swiftly intensifying confrontation following Iran's attack on Israel over the weekend subsided. However, tensions are still high and it is difficult to predict what either party will do next.

June delivery Brent futures dropped 52 cents, or 0.6 percent, to $89.58 per barrel.Pakistan is an oil-importing country, therefore if energy prices spike in the event of hostilities between Iran and Israel, it will have significant effects. The shock to the energy market may raise local fuel costs, push up inflation expectations, and have an effect on the balance of payments.