Rupee maintains upper hand against US dollar, closes near 224

The Pakistani rupee maintained its upward movement against the US dollar for the sixth successive session, closing near 224 in the inter-bank market on Friday.

As per the State Bank of Pakistan (SBP), the currency settled at 224.04, an appreciation of Rs2.11 or 0.94% against the US dollar.

On Thursday, the currency had continued on its merry recovery path, closing at 226.15, an appreciation of Rs2.65 or 1.17%. The currency has now improved Rs15.9 or 7.1% in the last six sessions.

The latest appreciation came after Minister of Finance Miftah Ismail said “one friendly country” has confirmed its assurance of helping Pakistan in meeting what the International Monetary Fund (IMF) calls a funding gap, saying that an announcement will be made soon.

“As a result of positive sentiment in market, rupee has continued recovering lost ground against the US dollar,” said Trust Securities and Brokerage Limited (TSBL) in a note on Friday.

“However, SBP's reserves have dropped by $190 million to an alarming level of $8.39 billion as of July 29, 2022, and this could negatively hit the exchange rate,” it added.

The decline in reserves comes following external debt and other payments, said the SBP.

The reserves’ position is critical for Pakistan, which is desperately seeking dollar inflows to meet its balance-of-payments needs.

Zafar Paracha, General Secretary at the Exchange Commission of Pakistan (ECAP), in a video message said the improvement in local currency comes after SBP's interventions in curbing speculation.

“Furthermore, the decline in July imports, which is expected to fall further in August, would bode well for the currency,” he said.

Pakistan’s imports on a month-on-month (MoM) basis declined by 37.7% in July 2022 as they remained $4.913 billion compared to $7.880 billion in June 2022.

On Friday, Finance Minister Miftah Ismail said that the government will continue to suppress imports for the next three months at the cost of slower economic growth, stressing that it did not have an immediate solution that would avert an economic crisis.

Inter-bank market rates for dollar on Friday

BID Rs 224

OFFER Rs 225

Open-market movement

In the open market, the PKR gained 4 rupees for both buying and selling against USD, closing at 220 and 222, respectively.

Against Euro, the PKR remained unchanged for both buying and selling, closing at 224 and 226 respectively.

Against UAE Dirham, the PKR gained 20 paisas for both buying and selling, closing at 60.30 and 60.80, respectively.

Against Saudi Riyal, the PKR gained 10 paisas for both buying and selling, closing at 58.10 and 58.60, respectively.

Open-market rates for dollar on Friday

BID Rs 220

OFFER Rs 222