Rupee maintains uptrend, regains Rs2.13

Currency bounces back on assertion country has averted default

KARACHI:

Pakistani currency maintained its uptrend for the seventh consecutive working day, as it regained almost 1%, or Rs2.13, to close at Rs221.91 against the US dollar in the inter-bank market on Wednesday.

It came after officials said Pakistan had successfully mitigated the risk of default on international payments.

The rupee had closed at Rs224.04 against the greenback on Friday, according to the central bank.

With the latest day-to-day recovery, the rupee has cumulatively recovered 7.50%, or Rs18.03, in the past seven successive working days.

Prior to the recovery, the rupee had slumped 13.75%, or Rs31.31, in 10 consecutive working days to an all-time low close at Rs239.94 on July 28 on elevated and pending import payments and fast depletion of foreign exchange reserves.

Finance Minister Miftah Ismail has said the country has come out of the Sri Lanka’s default like situation on import payments and foreign debt repayments.

In the backdrop of the development “the demand for dollar has decreased in the market, as exporters have started selling the foreign currency, which they had accumulated as they waited for further depreciation in the rupee value in the past,” Pak-Kuwait Investment Company (PKIC) Head of Research Samiullah Tariq said while talking to The Express Tribune.

“The rupee may consolidate at around Rs215-220 against the greenback in the current recovery phase.”

Oil prices are falling in the international markets which are favourable to emerging economies like Pakistan, as it heavily relies on imported energy.

The drop in energy prices was expected. This would cut the current account deficit (CAD) beyond original estimates for the current fiscal year 2023 and reduce requirement for foreign financing for the country during the year, he said.

Government raises Rs467bn

The government has raised debt worth Rs467 billion through selling three to 12-month T-bills to commercial banks on Wednesday.

The cut-off yields on the papers remained unchanged on higher side at 15.74% on three-month T-bills, 15.80% on six-month paper and 15.93% on 12-month debt securities.

Published in The Express Tribune, August 11^th, 2022.

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