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PKR continues winning streak against USD, gains another 0.37%

  • Local currency has now appreciated for successive 23 sessions
  • Has cumulatively gained 9% since it hit a record low of 307.1 in inter-bank market on Sept 5
Published October 9, 2023

The Pakistani rupee continued its merry run against the US dollar, appreciating another 0.37% in the inter-bank market on Monday. This is the rupee’s 23rd successive increase against the greenback, and makes it one of the longest appreciation runs in history.

As per the State Bank of Pakistan (SBP), the rupee settled at 281.65 after an increase of Rs1.04 in the inter-bank market.

Last week, the Pakistani rupee gained 1.8% during the five sessions to close at 282.69 against the US dollar in the inter-bank market.

At the same time, gap with rates in the open market have narrowed to negligible levels, meeting a key condition of the programme with the International Monetary Fund (IMF).

The increase has come on the back of administrative measures including a crackdown on smuggling and structural reforms in the Exchange Companies’ sector.

Meanwhile, during the previous week, the Ministry of Finance asked all ministries to implement all the IMF as the first review under the Standby Arrangement (SBA) becomes due.

“This is the rupee’s longest appreciation run against the US dollar since the 2000s,” Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited, told Business Recorder.

“Essentially, it is a recovery rather than appreciation, as the PKR was previously overshot in the open-market.”

The market expert said the government’s crackdown in the open market against currency speculators and hoarders helped this recovery.

“However, the room for further improvement is narrowing as the Real Effective Exchange Rate (REER) is nearing 100. If the crackdown persists, the unusual volatility widely seen in the open market would come down,” he said.

The market expert highlighted that the currency remains vulnerable fundamentally, as the country has yet to see a significant increase in exports and remittances, while imports remain high.

Globally, the safe-haven US dollar edged higher on Monday as violence in the Middle East spooked markets, while a blowout US jobs report gave the greenback a further leg up.

The dollar index was last 0.11% higher at 106.21, drawing additional support from Friday’s data showing US employment increased by the most in eight months in September, potentially setting up for a higher-than-expected inflation print later this week.

Oil prices, a key indicator of currency parity, surged more than 2% on Monday as military clashes between Israel and the Palestinian Hamas group ignited fears of a wider conflict in the Middle East.

Inter-bank market rates for dollar on Monday

BID Rs 281.65

OFFER Rs 281.85

Open-market movement

In the open market, the PKR gained 1.00 rupee for both buying and selling against USD, closing at 277.50 and 280.50, respectively.

Against Euro, the PKR gained 2.00 rupees for both buying and selling, closing at 293.00 and 296.00, respectively.

Against UAE Dirham, the PKR gained 30 paisa for both buying and selling, closing at 76.20 and 76.90, respectively.

Against Saudi Riyal, the PKR gained 40 paisa for both buying and selling, closing at 74.10 and 74.80, respectively.

Open-market rates for dollar on Monday

BID Rs 277.50

OFFER Rs 280.50


Comments are closed.

a2aliii Oct 09, 2023 11:09am
The way Rupee is gaining without fundamentals, I expect Rs. > $ with a parity of PKR = $ 1.29 ;) in 365 Days. Kysa ;)
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Mustafa Oct 09, 2023 11:38am
It will stabilise in the range of 260-270 ... free fall was due to corrupt activities - not because of higher imports (consumption) ...
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Haris Oct 09, 2023 12:06pm
@a2aliii, Allah karay.
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Abdulrahman Oct 09, 2023 03:53pm
Abdul Rehman
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Az_Iz Oct 09, 2023 06:52pm
Unlike Dar’s stupid , arbitrary and artificial fixing of the rupee value, causing foreign exchange reserves to deplete and create other economic issues, this time, the rupee is appreciating by curbing speculation and administrative controls. And REER is about 100% which means rupee is neither artificially undervalued or overvalued. The government deserves credit on this score.
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Az_Iz Oct 09, 2023 06:56pm
This is a much saner way of bringing the exchange rate in line with the REER value, and curbing speculation that was causing havoc in the market. Let’s hope this will encourage people to send in remittances through formal channels, and encourage the exporters to bring in their proceeds into the country sooner.
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Az_Iz Oct 09, 2023 07:03pm
The country has the means and capabilities to put it’s house in order, and get on the path of prosperity. Need good governance. If it can improve it’s savings rate to be in line with other countries in the region like Bangladesh, China and India, it can grow and be prosperous like everyone else. Historically the savings in the country has been 10% behind others at every stage of development. If it can improve on that, it can build dams, railways, power plants and refineries with it’s own resources. It is not the lack of resources that is the major problem. It is how they are used for subsidies, imports and consumption, which is the problem.
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Usman Oct 09, 2023 07:37pm
@Mustafa, till date money exchnage companies are not taking in dirhams and asking to deposit it in there uae account and they will give us cash here in pakistan.Thats hundi and this is happening in islamabad blue area.
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