Rupee moves in narrow band

Recovers 0.14% to Rs214.65 against US dollar

KARACHI:

The consolidating Pakistani currency continued to fluctuate in a narrow band and regained 0.14% (or Rs0.30) to close at Rs214.65 against the US dollar in the inter-bank market on Friday.

The currency managed to edge up after Pakistan’s central bank reported an improvement in its foreign exchange reserves on a week-on-week basis after a gap of several weeks.

Moreover, the currency recovered on reports the IMF had officially communicated that its executive board would meet on August 29, 2022 to consider approving the release of next loan tranche of $1.2 billion for Pakistan.

Besides, the State Bank of Pakistan (SBP) allowed currency dealers to become sub-agents of primary dealers (banks) to play an increased role in attracting a higher amount of worker remittances from the overseas Pakistanis.

The step has apparently been taken to enhance the flow of remittances into the country. It will improve the supply of foreign currency in the inter-bank market.

The local currency had closed at Rs214.95 against the greenback on Thursday after losing almost half a percentage point (or Rs1.01) in two days (Wednesday and Thursday).

Meanwhile, the central bank injected Rs863.35 billion into commercial and Shariah-compliant banks at a return of 15.11% for 63 days through open market operations (OMO).

The injection is aimed at increasing the supply of funds to banks so that they could offer financing to the government.

Published in The Express Tribune, August 20^th, 2022.

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