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Pakistan's rupee sustained its momentum on Monday, recovering marginally against the US dollar in the inter-bank market as pressure due to heavy import payments seemed to have subsided.

Moreover, some clarity on economic and political front also drove recovery of the local currency.

As per the State Bank of Pakistan (SBP), the rupee closed the day Re0.53 or 0.22% higher at Rs238.84 against the US dollar.

On Friday, the local currency had ticked up marginally and broke a 10-session depreciation run to close at Rs239.37.

Speaking to Business Recorder, Pak-Kuwait Investment Company Head of Research Samiullah Tariq said the rupee’s value has largely stabilised against the US dollar.

Rupee ends 10-session depreciation run, closes at 239.37

“If you take a look, the rate at which banks are retiring LCs to importers is hovering between Rs236 to Rs242 and the rupee is between this threshold,” he said.

“Hence, we can conclude that the local currency is stabilising."

While Tariq saw little appreciation in the rupee in the short term, he predicted approval of the International Monetary Fund (IMF) board for the next tranche worth $1.2 billion and the subsequent receipt by Pakistan “will surely improve sentiment in the currency market”.

Arif Habib Limited Head of Research Tahir Abbas told Business Recorder that the rupee has recovered primarily on the back of easing import payment pressure.

On Sunday, Finance Minister Miftah Ismail highlighted that the government of Pakistan managed to shrink the import bill by $2.7 billion in July 2022.

This has helped steer a turnaround in sentiment at the foreign exchange market, say experts.

Abbas said oil imports fell because the country has ample stock in reserves, which has reduced pressure on the currency.

“Moreover, political and economic certainty is emerging in Pakistan which is also acting as a support."

The two-day recovery comes after the rupee registered its worst performance in July in over 50 years, depreciating 14.5% during the month.

The depreciation run came despite the IMF team reaching a staff-level agreement (SLA) with Pakistan authorities for the conclusion of the combined seventh and eighth reviews of the Extended Fund Facility (EFF) on July 14.

Inter-bank market rates for dollar on Monday

BID Rs 239

OFFER Rs 241

Open-market movement

In the open market, the PKR gained 6 rupees for both buying and selling against USD, closing at 240 and 242, respectively.

Against Euro, the PKR gained 5 rupees for buying and 5.50 rupees for selling, closing at 245 and 247 respectively.

Against UAE Dirham, the PKR gained 1.30 rupees for both buying and selling, closing at 65.50 and 66, respectively.

Against Saudi Riyal, the PKR gained 90 paisas for buying and one rupee for selling, closing at 63.80 and 64.30, respectively.

Open-market rates for dollar on Monday

BID Rs 240

OFFER Rs 242

Comments

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Hussain Naqvi Aug 01, 2022 10:43pm
AslamoAlikum: Now a days economy is an open book for the professionals. Data base calculations & predictions are common in forex trading. The economists, accountants, financials experts has warned that pkr is going to slide why authorities did not took immediate appropriate action to hold pkr rate. This is very surprising. Business Recorder published various articles of the most seniors finanical advisers and executives it was eye opening. The commercial players took the benift. Regards
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