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Markets

Inter-bank market: rupee sees massive gain, up 3.83% against US dollar

  • Settles at 275.44, an increase of Rs10.55, which is the highest day-on-day recovery after May 12, 2023
Published July 4, 2023

As widely expected, the Pakistani rupee made giant strides against the US dollar, appreciating 3.83% in the inter-bank market on Tuesday, an increase that comes on the back of the agreement signed with the International Monetary Fund (IMF).

At close, the currency settled at 275.44, an increase of Rs10.55, as per the State Bank of Pakistan (SBP).

“This is the highest day-on-day recovery after May 12, 2023 (Rs 13.85 or 4.86%),” Arif Habib Limited (AHL) said in a note.

Last week, the rupee registered back-to-back gains against the US dollar to settle at 285.99. Markets were shut for the Eid holidays last week and a bank holiday on Monday.


For the open-market report, click here


In a related development, Pakistan has reportedly sent a Letter of Intent (LoI) to the International Monetary Fund (IMF) containing nine major assurances following the staff-level agreement on a nine-month $3 billion stand-by arrangement (SBA).

Separately, Moody’s Investors Service on Monday said Pakistan’s new deal with the IMF will support macroeconomic stability.

Open-market: rupee posts gain but trading remains thin due to bank holiday

Moody’s also said that in the longer term, Pakistan needs to implement reforms including revenue-raising measures, whereas, in the near term the economy will remain subdued.

Meanwhile, experts said the currency market is responding to the Pakistan, IMF agreement.

“The market has shown positive enthusiasm in response to the government’s recent agreement with the IMF for a financial assistance plan worth $3 billion,” Waqas Kukaswadia, Deputy Head of Research at JS Global, told Business Recorder.

On Friday, the IMF and Pakistan reached a new $3 billion nine-month SBA, after the country failed to complete yet another IMF Extended Fund Facility (EFF) programme of $6.5 billion, which ended unsuccessfully on June 30, 2023.

However, the new SBA is being seen as a major positive for the battered economy that faced an incessant delay in revival of the IMF programme.

Globally, against a basket of currencies, the US dollar eased 0.039% to 102.910 after data overnight showed US manufacturing slumped further in June, reaching levels last seen when the nation was reeling from the initial wave of the COVID-19 pandemic.

Oil prices, a key indicator of currency parity, rose on Tuesday as markets weighed supply cuts for August by top exporters Saudi Arabia and Russia against the backdrop of an uncertain global economic outlook.

Comments

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Tulukan Mairandi Jul 04, 2023 10:04am
A huge bubble. Cash out while you can
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faisal Jul 04, 2023 10:43am
Let's open import and see where it settles. Will go lower in short term but import pressure should bring it close to 300 again.
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Muhammad Waqas Jul 04, 2023 11:45am
@Tulukan Mairandi, What bubble. Its temporary manipulation by dar to feed his false sense of achievement. Country manages to borrow 3bn after pleading an entire year and you're saying its a bubble?
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Abdullah Jul 04, 2023 02:51pm
Pti plan of fefaukt gone out of the window. Ow pdm should fix pakistan and postpon elections till 2025 jan
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Javed Jul 05, 2023 03:46am
Congratulations everyone
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