KARACHI: Some sense of calm prevailed through the markets during the previous week, with the rupee registering a substantial gain of 6.8% against the US dollar to close at 224.04 in the inter-bank.
The rupee closed stronger throughout the week, maintaining its momentum as Pakistan reported a narrower trade deficit and much lower import bill during July, taking pressure off the currency that had gotten a hammering at the hands of the dollar recently.
The strongest recovery was posted on Wednesday, however, a day after the International Monetary Fund (IMF) said that with the increase in petroleum development levy (PDL), Pakistan has completed the last prior action for the combined seventh and eighth review, adding that the board meeting is tentatively planned for late August once adequate financing assurances are confirmed.
The currency gained Rs9.58 or 4.2% higher that day, its biggest in years, injecting a fresh wave of hope through official quarters as well as businesses that the worst was now behind them. The following two days – Thursday and Friday – the rupee closed higher again, lending further credence that the earlier gain was not a one-off. The change in sentiment came on the back of IMF’s statement that was seen as a thumbs-up to the government’s policy measures. However, the lender also said that the board meeting is tentative planned for late August, once “adequate financing assurances are confirmed”.
Rupee maintains upper hand against US dollar, closes near 224
Later, in an official statement, an official source in Abu Dhabi emphasised the UAE’s intention to invest $1 billion in Pakistani companies in various economic and investment sectors, taking Pakistan closer to meeting what the IMF calls a funding gap. With Finance Minister Miftah Ismail confident that funding assurances would come soon, the rupee is likely to take direction from news flow with many analysts saying that there is further room for appreciation, provided Pakistan gets its funding needs in order.
Open-market movement
In the open market, the PKR gained 26 rupees for both buying and selling against USD, closing at 220 and 222, respectively.
Against Euro, the PKR gained 26 rupees for buying and 26.50 rupees for selling, closing at 224 and 226, respectively.
Against UAE Dirham, the PKR gained 6.50 rupees for both buying and selling, closing at 60.30 and 60.80, respectively.
Against Saudi Riyal, the PKR gained 6.60 rupees for buying and 6.70 rupees for selling closing, at 58.10 and 58.60, respectively.
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THE RUPEE
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Weekly Interbank market rates for dollar
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Bid Close Rs. 224.00
Offer Close Rs. 225.00
Bid Open Rs. 240.00
Offer Open Rs. 242.00
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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. 246.00
Offer Open Rs. 248.00
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Copyright Business Recorder, 2022