Rupee surges to one-month high, closes below Rs285/$

Maintains uptick for 4th consecutive day driven by increase in supply of foreign currency

KARACHI:

In a notable trend, the Pakistani currency marked a one-month high, closing just below Rs285 against the US dollar in the interbank market. This positive trajectory has been sustained for the fourth consecutive working day, driven by an increase in the supply of foreign currency in the system.

State Bank of Pakistan (SBP) data indicates that the domestic currency gained 0.07%, or Rs0.20, concluding at Rs284.97 against the greenback. Over the past four working days, the currency has collectively improved by 0.24%, equivalent to Rs0.67.

Meanwhile, the Exchange Companies Association of Pakistan (ECAP) reported a 0.17% or Rs0.50 drop on a day-to-day basis in the local currency, closing at Rs286/$ in the open market.

Read: Saudi loan rollover props up rupee

This surge in the rupee comes on the heels of the SBP reporting a $77 million increase in the country’s foreign exchange reserves, reaching $7.25 billion in the week ending November 24, 2023. Although the reserves are relatively low, they currently provide import cover for less than two months.

The extension of $3 billion deposits by Saudi Arabia until December 2024 also played a role in maintaining the foreign exchange reserves at the current level, sustaining positive sentiment in the markets.

The rupee has now regained a net 7.76%, or Rs22.12, closing at Rs284.97/$ compared to the all-time low of Rs307.09/$ on September 5, 2023.

Published in The Express Tribune, December 2^nd, 2023.

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