Rupee rises for second consecutive session on softer oil prices

KARACHI: The rupee closed higher on Wednesday amid hopes that a slump in global oil prices will help Pakistan’s current account deficit and inflation.In the interbank market, the rupee ended at 278.54 per US dollar, compared with Tuesday’s close of 278.61.

Dealers said the rupee extended gains for the second straight session due to an improved supply of dollars. In addition, the drop in oil prices boosted investor sentiment on the local currency.

“The recent decline in oil prices offers much-needed relief to the country’s external account and eases inflationary pressures,” said Chase Securities in a note.“This development provides optimism that the recent drop in inflation to single digits may not be short-lived, as the external account remains stable,” it said.

However, the finalization of the International Monetary Fund’s loan programme remains a crucial milestone. “Negotiations are ongoing, with the government conceding to another IMF demand by agreeing not to introduce any new Special Economic Zones (SEZs),” it added.