Pakistani currency continued its stunning recovery for the fifth successive working day on Thursday, rising 1.08% (or Rs2.49), and touched a three-week high at Rs229.63 against the US dollar in inter-bank market.
Pakistani sovereign bonds, however, received a battering in the global market. Their prices remained low while yields continued to spike, suggesting the country’s default risk against maturing bonds stood elevated.
With the latest day-to-day recovery, the domestic currency has cumulatively regained 4.20% (or Rs10.08) in the past five working days.
“Falling import bill has fuelled the rupee’s uptrend (as suggested by the trade numbers of first two months of FY23),” Alpha Beta Core (ABC) CEO Khurram Schehzad said while talking to The Express Tribune.
The rupee’s recovery gained momentum following a significant reduction in oil prices in the world market, as Pakistan heavily relies on imported energy.
The share of energy came in at around 25% in the total import bill worth $80 billion in FY22.
The US West Texas Intermediate (WTI) crude once again slipped below $80 per barrel, after some recovery in the prior two days from a nine-month low of around $77 per barrel.
Crude oil had been at $116 per barrel in June 2022 in the world market.
Oil is losing steam with the strengthening of the US dollar as the two commodities move in opposite direction.
On the other hand, export earnings improved around 11% in the past two months (Jul-Aug FY23).
“Rising exports and falling imports have helped narrow down the current account deficit, which is a positive development for the rupee,” he said
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