After a horrendous 2021 that saw it lose 10% of its value, Pakistan's currency ended the final session of the year with a bang, appreciating Re1 against the US dollar in the inter-bank market on Friday.

As per the State Bank of Pakistan (SBP), the PKR closed at 176.51 against the USD after a day-on-day appreciation of 100 paisas or 0.57%. Earlier this week on Wednesday, the PKR had closed at its all-time record low of 178.24 against the USD.

“This is the third-highest percentage day-on-day recovery during CY21,” said Arif Habib Limited (AHL) in a research note.

The gain on Friday follows the one made on Thursday when the rupee broke its losing streak.

Against USD: Pakistan's rupee fights back with significant recovery

Cumulatively, the rupee depreciated nearly 10% CYTD, 10.68% FYTD, and 13.65% since its CY21’s high achieved on May 14 against the US dollar.

"The unexpected recovery of Pakistani rupee against US dollar comes as exporters have sold dollars in the market," Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company Limited, told Business Recorder.

“Exporters are encashing their LCs."

When asked about reports regarding central bank intervention, Tariq said, “I don’t think the SBP intervened.”

Talking about rupee performance throughout the year, Tariq said that the currency started off at 160 and also appreciated till mid-year.

“(However) opening of economies increased commodity prices, which created a balance-of-payments pressure, and drove inflation that was reflected in depreciation of the rupee,” he said.

Tariq said that the pressure would subside in the coming days, especially if the International Monetary Fund (IMF) board grants approval to Pakistan's Extended Fund Facility on January 12.

Inter-bank market rates for dollar on Friday

BID Rs. 176.45

OFFER Rs 176.55

Open-market movement

In the open market, the PKR gained 1.50 rupees for buying and one rupee for selling against USD, closing at 177.50 and 178.50, respectively.

Against Euro, the PKR gained 50 paisas for buying and one rupee for selling, closing at 199.50 and 201, respectively.

Against UAE Dirham, the PKR gained 60 paisas for buying and 70 paisas for selling, closing at 49.70 and 50.10, respectively.

Against Saudi Riyal, the PKR gained 30 paisas for buying and 40 paisas for selling, closing at 46.30 and 46.60, respectively.

Open-market rates for dollar on Friday

BID Rs 177.50

OFFER Rs 178.50