KARACHI: Pakistani rupee maintained its uptrend in the new fiscal year 2019-20 as well following an increase in the supply of dollars in the economy.
The currency improved Rs2 and closed at Rs158.06 to the US dollar in the inter-bank market on Tuesday compared to Rs160.05 on Friday. Cumulatively, the rupee has strengthened Rs6 against the greenback in the past two working days.
The improvement came following Prime Minister Imran Khan’s statement on Monday that stability would return to the rupee-dollar exchange rate from here onwards.
“Market talk that the rupee will drop to Rs180 and Rs200 is baseless,” Khan said while talking to senior journalists and anchor persons. He said the last two difficult months of May and June had come to an end for the economy.
Rupee recovers, closes at 160.05 against dollar
The central bank let the rupee depreciate 32% to Rs160.05 in the preceding fiscal year, which ended on Sunday. Experts said the recovery came following the receipt of first tranche of $500 million from Qatar on Saturday. Doha had announced an economic assistance package of $3 billion for Pakistan last week.
Apart from that, the expected approval of a $6-billion long-term loan programme for Pakistan by the International Monetary Fund (IMF) executive board on Wednesday also improved sentiments and fundamentals for the rupee. The approval is expected to be followed by the release of first tranche of $1 billion.
Moreover, Saudi Arabia also started the supply of petroleum products on deferred payments worth $275 million per month for Pakistan from July 1, 2019. Forex Association of Pakistan (FAP) President Malik Bostan said the rupee maintained its uptrend after the demand for dollars dropped in the inter-bank market.
“Earlier, import payments and debt repayments, which were scheduled to be made before the end of June, had created additional demand for dollars in the market. It had mounted pressure on the rupee,” he said.
Rupee touches new all-time low at 147.87 in inter-bank
Exchange Companies Association of Pakistan (ECAP) General Secretary Zafar Paracha, however, blamed banks for exploiting the importers under the newly introduced market-based rupee-dollar exchange rate in the name of creating balance between the demand and supply of dollar. He said the banks first jacked up the dollar’s rate by over Rs7 and pocketed a profit of around Rs2.5-3 billion through selling some $350-400 million to oil importers on June 26-27.
Gold hits two-week low
The pricing committee of the All Sindh Saraf and Jewellers Association (ASSJA) revised the gold price downwards by Rs800 to an almost two-week low at Rs77,800 per tola (11.66 grams) on Tuesday.
Published in The Express Tribune, July 3rd, 2019.
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