Rupee stabilises around 287-288 to a dollar

KARACHI:

Pakistani rupee exhibited signs of stabilising around Rs287-288 to a dollar in the inter-bank market as the currency continued to fluctuate in both positive and negative directions around that level for the past couple of weeks.

On Wednesday, the rupee appreciated 0.16%, or Rs0.45, to Rs287.46 against the greenback, ending its nominal two-day losing streak.

In the open market, the currency ticked up Rs0.25 to Rs294.50/$, according to the Exchange Companies Association of Pakistan (ECAP).

A seasoned businessman recently noted that the currency had depreciated by a net 1% over the past three months despite experiencing significant ups and downs.

In the three months, the rupee touched an all-time low at Rs299/$ in May in the backdrop of high political drama and a poor law and order situation. Later in July, it appreciated to nearly Rs275/$ after Pakistan got the latest International Monetary Fund (IMF) lifeline of $3 billion in late June 2023.

Market talk suggests the currency exchange rate is being driven by both dollar demand and supply and the prevailing business sentiment.

For most of the days except for a few in recent weeks, the demand and supply largely remained stable.

Dollar demand jumped sometime in the second half of July owing to the import payment pressure. Later, the demand fell to usual levels with exporters bringing export proceeds back home and stable inflows of worker remittances.

The government has now removed all restrictions on imports in the wake of IMF’s recommendation under its $3 billion loan programme.

Published in The Express Tribune, August 10^th, 2023.

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