Pakistan’s currency depreciated 0.46% (or Rs0.98) to Rs214.88 against the US dollar in the inter-bank market on Wednesday, ending its appreciation streak that continued for 11 consecutive working days.
The local currency had closed at a one-month high at Rs213.90 on Tuesday, according to the central bank.
It regained a cumulative 10.85% (or Rs26.04) in the past 11 successive working days till Tuesday since hitting an all-time low at Rs239.94 on July 28.
The currency on Wednesday recorded its first depreciation in the past two weeks after worker remittances slowed down 7.75% year-on-year to a five-month low at $2.52 billion and export earnings decreased 3.6% to $2.25 billion in July.
The drop in inflows changed sentiment in the inter-bank market and encouraged importers to buy dollar at the prevailing rate before it became expensive, experts said.
Earlier, the rupee emerged as the best performing currency in the world on Monday after it notched up the largest gain of 11% in the first half of August compared to all other currencies on the Bloomberg terminal, according to Topline Securities.
Excessive supply of dollar in the market helped the rupee to stage an 11-day-long rally. However, the supply of foreign currency decelerated after the sluggish data on export earnings and worker remittances.
Pak-Kuwait Investment Company head of research said last week the rupee would stabilise at around Rs215-220 against the greenback.
Arif Habib Limited Head of Research Tahir Abbas said the rupee would resume its uptrend after consolidating at current levels. “The currency is expected to recover further ground and reach Rs200 against the greenback over the next 20 to 30 days,” he said.
Abbas pointed out that the rupee would resume its uptrend as the International Monetary Fund (IMF) executive board was scheduled to meet in the last week of August to approve the release of next loan tranche of $1.2 billion.
Pakistan has just signed the Letter of Intent (LoI) – the list of economic conditions the government has agreed to implement under the IMF programme.
Published in The Express Tribune, August 18th, 2022.
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