Rupee recovers over Rs2 vs dollar as pressure eases
photo: file
Increased supply of the US dollar eased pressure on the Pakistani currency and helped it recover a notable 0.76%, or Rs2.18, at Rs287.20 against the greenback in the inter-bank market on Thursday.
As per the State Bank of Pakistan’s (SBP) data, in the past three consecutive working days, the rupee had lost over 1% of its value, or Rs2.93, touching a 12-week low at Rs289.38 against the dollar. In the open market, the domestic currency remained unchanged at Rs292.50/$ on Thursday, according to the Exchange Companies Association of Pakistan (ECAP).
Pak-Kuwait Investment Company Head of Research Samiullah Tariq said that the increase in workers’ remittances and the surge in dollar supply from exporters, particularly at the 12-week high exchange rate, helped reduce pressure on the rupee.
The currency touched an almost three-month low on import payment pressure as reports suggested that traders had made some notable payments over the past couple of days.
Tariq, an expert in currency matters, pointed out that the rupee-dollar exchange rate was moving in both directions, depending on the demand and supply situation, because the government had removed all restrictions on goods import to prop up economic activities.
He added that it was up to commercial banks whether to provide financing to importers while considering the availability of the US dollar.
“Rupee is moving both ways in the wake of International Monetary Fund’s latest $3 billion loan programme, which has reduced import payment pressure and enabled the country to focus on economic activities.”
The SBP has projected that Pakistan’s economy will grow 2-3% in the current fiscal year compared to only 0.3% growth in FY23.
Additionally, the foreign exchange reserves, held by the central bank, will cross $10 billion by the end of current fiscal year on June 30, 2024 compared to the current level of $8.2 billion.
Apart from that, the current account deficit will remain under control at 0.5-1.5% of GDP compared to 0.7% in FY23.
Taking cue from the rupee’s recovery, the All Pakistan Saraf Gems and Jewellers Association, the gold pricing body, announced a reduction of Rs2,800 in the precious metal’s price that reached Rs220,200 per tola (11.66 grams) on Thursday.
In the international market, the gold price dropped $15 to $1,936 per ounce (31.10 grams).
Published in The Express Tribune, August 4th, 2023.
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