- Cumulatively, the rupee has appreciated Rs15.76 or 7.04% against the US dollar in the past nine sessions
Pakistan's rupee continued to appreciate against the US dollar for the ninth successive session on Wednesday, appreciating nearly 0.8% in the inter-bank market.
As per the State Bank of Pakistan (SBP), the rupee closed at 223.94 after appreciating Rs1.7 or 0.76%. In the last nine trading sessions, the rupee has cumulatively appreciated Rs15.76 or 7.04%.
On Tuesday, Pakistan's rupee had appreciated against the US dollar for the eighth successive session, closing at 225.64 after appreciating Rs1.65 or 0.73%.
The recent appreciation run is being attributed to several reasons including declarations made by the newly-appointed finance minister Ishaq Dar that the country's currency will strengthen to under 200 rupees to the US dollar.
Additionally, analysts say Dar's return to the helm of the country's financial affairs also provides a bullish sentiment in the money market, putting curbs on speculation activity as well.
Meanwhile, on Tuesday, SBP Governor Jameel Ahmad informed the National Assembly Standing Committee on Finance that action would be taken against banks and foreign exchange companies (ECs) involved in exchange rate volatility upon finalisation of the inquiry.
The Finance Committee directed the SBP to take appropriate action against all banks and exchange companies that were involved in speculation.
Talking to a private channel, Exchange Companies Association of Pakistan (ECAP) General Secretary Zafar Paracha said ECs do not have the capacity to conduct currency manipulation.
“ECs are under a lot of restrictions, there are stringent requirements while purchasing these dollars. Such activity can take place in stock trading, and inter-bank treasurer trading. We only sell and buy to consumers,” he said.
Paracha acknowledged, however, that the dollar rate should not be above 200.
Moreover, in a positive development, Pakistan's trade deficit contracted 20% to $2.88 billion on a monthly basis in September 2022 led by a sharp decline in imports.
Globally, the US dollar fell about 1.6% on the euro overnight to test parity at $0.9999 and 1.3% against sterling to $1.1490.
The US dollar index fell 1.3%, its biggest drop since the wild pandemic market of March 2020.
Oil prices, a key determinant of currency parity, inched lower on Wednesday after gains in recent days as OPEC+ producers looked set to agree on deep output target cuts later in the day despite a tight market.
Inter-bank market rates for dollar on Wednesday
BID Rs 224
OFFER Rs 225
In the open market, the PKR gained 1.50 rupees for both buying and selling against USD, closing at 225 and 227, respectively.
Against Euro, the PKR gained 2 rupees for both buying and selling, closing at 222 and 224 respectively.
Against UAE Dirham, the PKR gained 50 paisas for both buying and selling, closing at 62 and 62.50, respectively.
Against Saudi Riyal, the PKR gained 20 paisas for both buying and selling, closing at 60.50 and 61, respectively.
Open-market rates for dollar on Wednesday
BID Rs 225
OFFER Rs 227