Pakistan’s rupee continued its merry way against the US dollar for the third consecutive session, appreciating 0.16% in the inter-bank market on Tuesday.
As per the State Bank of Pakistan (SBP), the rupee closed at 176.43 after a day-on-day appreciation of 29 paisas or 0.16%. The rupee had earlier registered a gain of 0.12% and 0.03% on Friday and Monday, respectively.
The improvement in exchange parity comes as it was learnt that Pakistan received $1 billion from the Sukuk bond issuance, informed Fahad Rauf, Head of Research at Ismail Iqbal Securities.
“The completion of the upcoming International Monetary Fund (IMF) review would add $1 billion to the reserves, letting off further steam,” he said.
The IMF Executive Board is set to meet on February 2 for Pakistan's sixth review of the Extended Fund Facility (EFF) with the South Asian economy confident that it will be approved.
Rupee records marginal gain against US dollar
On Friday, the government had managed to pass the SBP (Amendment) Bill, 2021 from Senate, its last condition ahead of the board meeting.
The successful completion of the review would make available SDR 750 million (about $1,059 million), bringing total disbursements under the EFF to about $3,027 million.
Meanwhile, Rauf said the rupee currently remains fairly valued, and the IMF approval is just likely to stabilise the exchange rate in the current range.
"Furthermore, the upcoming import bill is expected to decline, and is expected to be in the range of $5.5-6 billion, due to slowdown in vaccine import and TERF financing.
“The reduction in import bill would help reduce pressure on the rupee. However, rising commodity prices would create a hurdle in normalisation,” he added.
Meanwhile, rising oil prices remain a cause of concern for Pakistan, as its purchase constitutes a major portion of the country’s import bill. Oil slipped on Tuesday, staying close to a seven-year high hit last week, weighed by expectations of a rise in US inventories, although the prospect of a limited production hike by OPEC+ countries and solid demand growth lent support.
Brent crude was down 28 cents, or 0.3%, at $88.98 a barrel. Whereas, US West Texas Intermediate crude slipped 18 cents, or 0.2%, to $87.97.
Inter-bank market rates for dollar on Tuesday
BID Rs 176.30
OFFER Rs 176.45
Open-market movement
In the open market, the PKR remained unchanged for both buying and selling against USD, closing at 177 and 178, respectively.
Against Euro, the PKR lost 10 paisas for buying while remaining unchanged for selling, closing at 198.10 and 200, respectively.
Against UAE Dirham, the PKR gained 30 paisas for buying and 1.20 rupees for selling, closing at 49.20 and 49.70, respectively.
Against Saudi Riyal, the PKR gained 20 paisas for buying and 15 paisas for selling, closing at 46.70 and 47.15, respectively.
Open-market rates for dollar on Tuesday
BID Rs 177
OFFER Rs 178