KARACHI: The rupee appreciated another 1.74% during the previous week, closing positive in all five sessions to settle at 291.76 against the US dollar on Friday.
The gains meant the rupee has now appreciated in 13 successive sessions against the dollar, taking cumulative appreciation to nearly 5.3% since the local currency hit an all-time low of 307.1 in the inter-bank market earlier this month.
The rupee’s rate in the open market has also become stronger, reducing the ‘premium’ to negligible values and meeting the benchmark set by the International Monetary Fund (IMF).
While many experts say the rupee’s appreciation is on the back of administrative and enforcement measures, some believe the gain reflects the currency’s fundamental value if ‘speculation’ and negative sentiment were to be kept aside.
However, the sentiment on the rupee has come on the back of Pakistan’s dollar inflows that have dried up after the tranche from the IMF and deposits by the UAE and Saudi Arabia.
At the same time, foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by a mere $56 million on a weekly basis, clocking in at $7.7 billion as of September 15, latest data showed.
The reserves are still not high enough to sustain Pakistan’s debt payments and import needs, but the country’s caretaker administration is confident inflows from the World Bank, Asian Development Bank along with the IMF’s second tranche of the Stand-By Arrangement – expected after the review in November – will shore up reserves.
Eyes will be on remittance inflows and the current account balance in the coming months. Meanwhile, an election window in January has been announced, which is likely to lend some stability to the currency.
In the open market, the PKR gained 3.50 rupees for both buying and selling against USD, closing at 290.50 and 293.50, respectively.
Against Euro, the PKR gained 9.00 rupees for both buying and selling, closing at 312.00 and 315.00, respectively.
Against UAE Dirham, the PKR gained 20 paisa for both buying and selling, closing at 82.00 and 82.80, respectively.
Against Saudi Riyal, the PKR gained 1.00 rupee for both buying and selling, closing at 78.00 and 78.70, respectively.
Weekly inter-bank market rates for dollar
Bid Close Rs. 291.75
Offer Close Rs. 291.95
Bid Open Rs. 296.80
Offer Open Rs. 297.00
Weekly open-market rates for dollar
Bid Close Rs. 290.50
Offer Close Rs. 293.50
Bid Open Rs. 294.00
Offer Open Rs. 297.00
Copyright Business Recorder, 2023