Rupee rises for sixth day in a row, gold prices drop
AA Gold Commodities’ Director, Adnan Agar says if investors were genuinely concerned about the war, the price of crude oil should have continued to rise, rather than dropping to $81. photo: REUTERS
The Pakistani currency maintained a winning streak on the sixth consecutive working day, extending gains at slightly over Rs284 against the US dollar in the interbank market due to an increase in the supply of foreign currency in the system.
The safe-haven of gold, however, dropped almost 2%, or Rs 4,200, to a one-week low at Rs219,400 per tola (11.66 grams), in line with the global trend on Tuesday.
The State Bank of Pakistan (SBP) reported the domestic currency ticked up 0.05%, or Rs0.15, to close at Rs284.338 against the greenback on Tuesday. With this, the currency has cumulatively improved 0.44% or Rs1.26 in the past six days to date.
The Exchange Companies Association of Pakistan reported the currency gained 0.08% or Rs0.25 on a day-to-day basis to close at Rs285.25/$ in the open market.
Read: Rupee continues to appreciate
Market talk suggests the currency has maintained an uptrend since the country successfully completed the International Monetary Fund (IMF) first economic review under its $3 billion loan programme. The currency had unnecessarily come under pressure against the US dollar during the review (held in the first half of November) on uncertainties about the outcome of the review despite the country having met almost all the conditions set by the Fund.
IMF staff level approval for the release of the second tranche of $700 million at the successful completion of the review, coupled with the improvement in the country's foreign exchange reserves to $7.25 billion, extended support to the rupee.
The All Sarafa Gem and Jewellers Association reported the correction in gold for local markets after the international bullion bazaar corrected 1.6% or $37 in the past 24 hours to $2,057 per ounce. Investors booked profits after global petroleum oil prices derailed, suggesting the international inflation reading would slow down, which does not stand supportive towards gold.
Published in The Express Tribune, December 6th, 2023.
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