- Currency has cumulatively appreciated Rs14.06 or 6.23% in the last eight sessions
Pakistan's rupee appreciated against the US dollar for the eighth successive session on Tuesday, closing over 0.7% higher in the inter-bank market.
As per the State Bank of Pakistan (SBP), the rupee closed at 225.64 after appreciating Rs1.65 or 0.73%. In the last eight trading sessions, the rupee has cumulatively appreciated Rs14.06 or 6.23%.
On Monday, Pakistan's rupee had maintained its upward trajectory against the US dollar for the seventh straight session, closing at 227.29 after appreciating Rs1.16 or 0.51% in the inter-bank market.
Analysts have attributed the rupee's recent gain to the return of Ishaq Dar, widely seen as an advocate of a strong rupee, and the curb in speculation activity.
The newly-appointed finance minister on Monday even said that the country’s currency could strengthen to under 200 rupees to the US dollar.
“The rupee’s real value is below 200 (to $1), and, God willing, it will come below 200 (rupees),” Dar said in an interview with a local television channel.
He added that the rupee would be strengthened through government “policies” as the current rate was inflated due to speculation.
Talking to Business Recorder, Abdullah Umer, an analyst at Ismail Iqbal Securities Limited, said there has been no major shift in inflows, as the improvement in rupee is mostly driven by sentiment.
“However, the dollar’s strength has diminished internationally, which is being reflected in the currency market,” he added.
On Dar’s recent statements, the analyst was of the view that “it would be very difficult to bring rupee below 200, even if speculation factor is excluded”.
The analyst said that the response from the international community in wake of flood assistance remains quite subdued.
“Pakistan has received only $100-150 million in flood relief assistance to date, against UN’s appeal of $816 million,” he said.
“Economic realities would kick in from winter onwards as pressure from commodities and import payments would add pressure on the rupee, unwinding this appreciation trajectory,” he said.
Internationally, the US dollar lost some support from a slide in Treasury yields overnight after local economic data showed a slowdown in manufacturing, hinting that aggressive Federal Reserve rate hikes are already being felt.
The dollar index, which measures the currency against six peers including sterling and the euro, was about flat at 111.55, not far from Monday's low of 111.46, a level last seen on September 23.
Oil prices, a key determinant of currency parity, rose on Tuesday as expectations that OPEC+ may agree to a large cut in crude output on Wednesday offset concerns about the global economy.
Inter-bank market rates for dollar on Tuesday
BID Rs 225.65
OFFER Rs 226.65
In the open market, the PKR gained 1.50 rupees for both buying and selling against USD, closing at 226.50 and 228.50, respectively.
Against Euro, the PKR remained unchanged for both buying and selling, closing at 224 and 226 respectively.
Against UAE Dirham, the PKR gained 50 paisas for both buying and selling, closing at 62.50 and 63, respectively.
Against Saudi Riyal, the PKR lost 20 paisas for both buying and selling, closing at 60.70 and 61.20, respectively.
Open-market rates for dollar on Tuesday
BID Rs 226.50
OFFER Rs 228.50