Rupee breaches 280 barrier against dollar

Recovery comes after central bank reports remittances sent by overseas Pakistanis hit six-month high in September

KARACHI:

Pakistani rupee maintained its powerful rally for the 25th consecutive working day on Wednesday, breaching the strong psychological barrier of Rs280 against the US dollar for the first time in three months.

According to State Bank of Pakistan’s (SBP) data, the currency gained 0.36%, or Rs1, and hit a new three-month high at Rs279.51 against the greenback in inter-bank market. With the fresh uptick, the currency has cumulatively regained almost 10%, or Rs27.59, in the past 25 days.

The latest recovery came after the central bank reported that the remittances sent by overseas Pakistanis hit a six-month high at $2.20 billion in September.

The increase was attributed to the elimination of illegal currency markets, which forced many expatriates to send money back home through official channels like banks and authorised exchange companies. Inflows are expected to gradually accelerate and reach around $2.40-2.50 billion in the current month, which would further prop up the rupee.

The smooth and steady recovery suggests the rupee may strengthen to Rs250-260/$ as the caretaker government believes it is the actual value of the local currency against the greenback.

The winning streak came after the rupee hit the all-time low at Rs307.10/$ on September 5, 2023. In open market, the currency extended gains by Rs1 to Rs279/$ on a day-to-day basis, according to the Exchange Companies Association of Pakistan. The rupee has cumulatively recovered 17.56%, or Rs49, in retail market in the past one month.

Moreover, in response to the uptrend in the global market, the local gold pricing body revised up the commodity’s price by Rs5,500 to Rs205,000 per tola (11.66 grams).

The All Pakistan Saraf Gems and Jewellers Association reported that gold rose by $16 to $1,872 per ounce (31.10 grams) in the international market.

Published in The Express Tribune, October 12^th, 2023.

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