Fifth successive gain: Pakistan's rupee appreciates nearly 1.1% against US dollar

Pakistan's rupee marched upwards against the US dollar for the fifth successive session on Thursday, closing over 1% higher in the inter-bank market as bullish sentiment over Ishaq Dar's return continued.

As per the State Bank of Pakistan (SBP), the rupee closed at 229.63 after appreciating Rs2.49 or 1.08%. In the last five trading sessions, the rupee has cumulatively appreciated Rs10.08 or 4.3%.

On Wednesday, Pakistan's rupee had registered a gain for the fourth successive session, closing at 232.12 after appreciating Rs1.79 or 0.77% in the inter-bank market.

Dar, who replaced Dr Miftah Ismail as finance minister, on Wednesday said that the country is currently facing its worst economic crisis owing to the mismanagement of the previous Pakistan Tehreek-e-Insaf (PTI) government.

The finance minister said that our currency does not deserve to be where it currently is. “I believe some speculators who had been playing the game have now stopped," he said.

“We believe in the market economy but no one will be allowed to play with the local currency. The speculators or Hundiwalas do not understand that depreciating the local currency by Re1 results in piling up debt by Rs110 billion."

Umair Naseer, Head of Research at Topline Securities, told Business Recorder that speculation has reduced after Dar’s recent statements. "This has eased a bit of the pressure on the currency,” he said.

However, there are no fundamental developments driving the rupee's upward trend, said Naseer.

“Concessions from the International Monetary Fund (IMF) and inflows from multilateral and bilateral support in wake of flood support are yet to be materialised.

“If inflows are not received, the rupee would be back under pressure,” he said.

Meanwhile, Zafar Paracha, General Secretary of Exchange Companies Association of Pakistan (ECAP) told Business Recorder that Dar's arrival is driving rupee’s appreciation “as earlier news of funding from multilateral and bilateral institutions of relief pertaining to floods didn’t affect the market much”.

“Speculative activity in banks was very high, but after SBP issued show-cause notices and Dar’s recent statements, the sentiment has changed,” said Paracha.

However, the authorities should maintain a firm grip against those involved in such speculative activities, he added.

Globally, currencies continued to be pressured by a US dollar boosted by hawkish Federal Reserve monetary tightening.

The dollar index, which measures the greenback against a group of major currencies, was last at 112.660 after hitting a fresh 20-year high of 114.78.

Oil prices, a key determinant of currency parity, fell on Thursday, with a stronger dollar paring the previous day’s more than $3 gain, though losses were capped by indications that the OPEC+ producer group might cut output.

Inter-bank market rates for dollar on Thursday

BID Rs 229.60

OFFER Rs 230.60

Open-market movement

In the open market, the PKR gained 3 rupees for both buying and selling against USD, closing at 228 and 230, respectively.

Against Euro, the PKR remained unchanged for both buying and selling, closing at 222 and 224 respectively.

Against UAE Dirham, the PKR remained unchanged for both buying and selling, closing at 62.50 and 63, respectively.

Against Saudi Riyal, the PKR gained 20 paisas for both buying and selling, closing at 60.50 and 61, respectively.

Open-market rates for dollar on Thursday

BID Rs 228

OFFER Rs 230