Rupee appreciates to three-week high
Pakistani currency maintained its uptrend for the fifth consecutive working day as it regained another 1.17% (or Rs2.65) to a three-week high at Rs226.15 against the US dollar in the inter-bank market on Thursday.
The currency made the recovery after Saudi Arabia agreed to issue the required guarantee for $4 billion financing to Pakistan. The International Monetary Fund (IMF) had conditioned the revival of its $7 billion loan programme with such guarantee from a friendly country.
Besides, the rollover of $2 billion loan by China supported the local currency in extending its recovery drive. With this, Beijing has rolled over a cumulative $4.3 billion in the past couple of months.
The rupee had closed at Rs228.80 on Wednesday, according to Pakistan’s central bank.
The currency made a record recovery of Rs9.58 (or 4%) in a single day on Wednesday after the country’s trade deficit narrowed to half in July compared to June and the IMF acknowledged that Pakistan had met all the prerequisite conditions for the revival of its loan programme.
With the latest recovery, the currency has regained a cumulative 5.75% (or Rs13.79) in the past five working days.
Earlier, the currency had slumped a cumulative 13.75% (or Rs31.31) in 10 consecutive working days to an all-time low close at Rs239.94 on Thursday (July 28).
Reports about the expected issue of guarantee by the kingdom and rollover of Chinese loan forced exporters to sell dollars on forward counters in the inter-bank market. Accordingly, the supply of foreign currency reduced the demand for it and helped the rupee gain ground.
Published in The Express Tribune, August 5th, 2022.
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