Pakistan's rupee recorded its third successive gain against the US dollar, appreciating 0.5% in the inter-bank market to close near 182 on Tuesday, a remarkable recovery after the currency hit its record low last week.

As per the State Bank of Pakistan (SBP), the rupee closed at 182.02 after a day-on-day appreciation of 91 paisas or 0.50%. On Friday, the local currency had recorded its biggest increase on a day-to-day basis in the inter-bank market in two years after it closed at 184.68.

In the last three trading sessions, the rupee appreciated by 3.4%. Pakistan's currency has been under pressure for months now, and has gradually weakened from 152.28 in less than a year. In the last 30 sessions, it has depreciated on 21 occasions, gained 7 times, and remained unchanged in two.

Rupee registers yet another gain, up 0.96% against US dollar

Brokerage house BMA Capital said decline in political noise and tightening economic measures taken by the central bank should help stabilise the local currency.

“We expect the rupee, which has been under increased pressure over the last few months due to mounting import bill and hefty debt repayments, to stabilise,” read the report.

“Recent hike in the policy rate by 250bps and imposition of 100% cash margin on the import of 177 non-essential items will also help soften CPI readings going forward and ease off pressure on burgeoning current account deficit.”

“Recent comments by the SBP governor regarding having adequate funding to bridge the external account shortfall also serve as a good omen for investor sentiment,” it added.

Meanwhile, despite the appreciation run, some market experts remain apprehensive over the sustainability of the ongoing upward movement.

Asad Rizvi, ex-Treasury Head at Chase Manhattan, was of the view that the recent gain has nothing to do with the economy or politics. “It’s the result of the new government’s statement and its past policy of maintaining strong PKR,” said Rizvi.

“Time will tell if the ongoing trend is sustainable or not,” he added.

Meanwhile, Kamran Nasir, CEO of JS Global Capital Limited while talking to a private channel, said that the new government under the leadership of Prime Minister Shehbaz Sharif needs to implement policies in order to sustain the initial market frenzy. “Among some of the immediate steps include controlling the widening fiscal deficit," he said.

“Secondly, it is important to renew negotiations with the International Monetary Fund (IMF)."

Also read: Fitch says Pakistan’s political volatility adds to external financing risk

Inter-bank market rates for dollar on Tuesday

BID Rs 181.90

OFFER Rs 182.02

Open-market movement

In the open market, the PKR gained 1.20 rupees for buying and 1.50 rupees for selling against USD, closing at 182.50 and 183.50, respectively.

Against Euro, the PKR gained 1.90 rupees for buying and 2 rupees for selling, closing at 195.10 and 197, respectively.

Against UAE Dirham, the PKR gained 68 paisas for buying and 70 paisas for selling, closing at 48.82 and 49.30, respectively.

Against Saudi Riyal, the PKR lost 2 paisas for buying while remaining unchanged for selling, closing at 48.32 and 48.80, respectively.

Open-market rates for dollar on Tuesday

BID Rs 182.50

OFFER Rs 183.50