Pakistan Rupee Resilient Amid Rising Oil Prices and Middle East Tensions

Pakistan's rupee has remained relatively stable against the US dollar despite rising oil prices and an increasing import bill, economists say. However, a prolonged Middle East conflict could start to erode the factors supporting the currency.

The rupee stood at Rs277.1 per dollar on September 29, up 1.5 percent from Rs281.4 a year earlier, according to the finance ministry's Monthly Economic Update & Outlook released on September 30.

Economist Muhammad Waqas Ghani said that dollar inflows had so far been sufficient to absorb the pressure from higher import bills and keep the currency broadly stable, but warned that a prolonged conflict in the Gulf and sustained oil prices above $100 per barrel could widen the import bill and increase demand for dollars.

Pakistan relies heavily on imported energy, and is already seeing the impact of higher prices on its import bill. Petroleum imports rose more than eight percent to $2.75 billion in the first two months of the current fiscal year, which began in July, compared with the same period last year.