Rupee snaps losing streak

Witnesses first recovery in 29 days of 0.65%

KARACHI:

Asia’s worst performing currency, the Pakistani rupee finally witnessed the first-ever recovery of 0.65% (or Rs1.95) in the past six-weeks to close at Rs267.68 against the US dollar in the interbank market on Tuesday, snapping a 29-day downward streak.

The partial recovery in the rupee and downward trend in gold in the global market also forced the domestic bullion pricing body to revise the rate of metal by Rs9,000 per tola (11.66 grams) to Rs201,500 in Pakistan.

The domestic rupee had emerged as the worst-performing currency in the region after devaluing cumulatively by 14.36% (or Rs38.74) in a free-fall in the past three days to close at an all-time low at Rs269.63 against the greenback on Monday.

Market talk suggests the rupee witnessed this small recovery after the inflow of workers’ remittances and export earnings both increased.

To recall, exporters had partially stopped receiving proceeds in wait for the expected rupee devaluation, while oversees Pakistanis had switched to unofficial channels to send funds to their family members in a bid to avail a higher rupee-dollar exchange rate.

In the latest move, the government let the rupee depreciate drastically to meet a condition of the International Monetary Fund (IMF) loan programme.

Pakistan and the IMF kick started staff-level talks for the ninth review of the domestic economy on Tuesday. The talks will culminate on February 9, 2023.

The All-Pakistan Sarafa Gems and Jewellers Association (APSGJA) reported that “the gold price had cumulatively surged by 13.60% (or Rs25,200) in the past 10 consecutive working days to an all-time high at Rs210,500 per tola on Monday compared to Rs185,300 on January 19, 2023”.

 

Published in The Express Tribune, February 1^st, 2023.

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