KARACHI: The rupee witnessed another week of strength, gaining across all five sessions for cumulative appreciation of 3.9% to close at 219.92 against the US dollar in the inter-bank market on Friday.
The PKR has been on an upward trajectory since the last week of September and gained nearly 9% in value as the return of Ishaq Dar sent out a wave of bullish sentiment in the currency market, which also curbed speculation activity. Additionally, spread between the inter-bank and open markets has also reduced to a negligible value, signalling a curb in speculation.
During the week, Dar’s statement, after he took over as finance minister, that the currency could even come below 200 gave fresh impetus even as the US dollar remained strongly poised, buoyed by a chorus of hawkish Federal Reserve speakers and as investors bet a solid jobs data later in the day will keep the world’s biggest central bank on its aggressive tightening path to tame inflation.
However, many analysts believe that the rupee’s recent appreciation run, which has extended across 11 sessions, may still be short-lived as Pakistan’s foreign exchange reserves continue to deplete and further dollar inflows have not yet materialised.
However, Pakistan reported a narrower trade deficit on a monthly basis, while the Asian Development Bank (ADB) also announced provision of flood relief support to the tune of $2.3-2.5 billion, including $1.5 billion for the BRACE programme, which will improve the inflows position of the country.
Additionally, during the week, State Bank of Pakistan (SBP) chief spokesperson Abid Qamar said that the central bank will soon complete an investigation into alleged manipulation by commercial banks of foreign exchange operations in the country, further putting the brakes on any speculation tendency in the markets. Analysts believe, moving forward, the rupee will stabilise around a short-term equilibrium with its further trend determined by Pakistan’s economic and balance-of-payments’ position.
Open-market rates
In the open market, the PKR gained 8 rupees for both buying and selling against USD, closing at 220 and 222, respectively. Against Euro, the PKR gained 6 rupees for both buying and selling, closing at 219 and 221, respectively.
Against UAE Dirham, the PKR gained 1.70 rupees for both buying andselling, closing at 61 and 61.50, respectively.
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THE RUPEE
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Weekly Interbank market rates for dollar
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Bid Close Rs. 219.90
Offer Close Rs. 220.90
Bid Open Rs. 228.60
Offer Open Rs. 229.60
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Weekly Open market rates for dollar
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Bid Close Rs. 220.00
Offer Close Rs. 222.00
Bid Open Rs. 228.00
Offer Open Rs. 230.00
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Copyright Business Recorder, 2022
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