In response to a surge in foreign currency inflows, the Pakistani currency continued its upward trajectory for the third consecutive working day, reaching a six-week high of slightly over Rs283.50 against the US dollar in the interbank market on Thursday.
Additionally, the local gold market experienced a noteworthy increase, with gold prices reaching almost a week-high at Rs218,300 per tola (11.66 grams) in Pakistan on the same day, aligning with global trends.
The All Pakistan Sarafa Gems and Jewellers Association reported a significant 2.68% or Rs5,700 per tola surge in the metal’s price on Thursday, following a 2.70% increase or $54 to $2,052 per ounce (31.10 grams) in the global market.
According to data from the State Bank of Pakistan (SBP), the domestic currency saw a 0.04% increase or Rs10, closing at Rs283.51 against the US dollar.
With the exception of a minor dip on Thursday of Rs0.03, the currency has seen a cumulative improvement of 0.75% or Rs2.13 over the past three weeks.
This recent uptick follows Caretaker Finance Minister Dr Shamshad Akhtar’s projection that Pakistan is expected to receive $4.5 billion from multilateral and bilateral creditors in the current fiscal year 2023-24 (Jul-Jun).
Read With slight uptick, rupee stands at 283.61
The latest developments are likely to contribute to an increase in the country’s foreign exchange reserves (held by SBP) to the targeted level of $9 billion by the end of June 30, 2024, up from slightly over $7 billion at present, thereby strengthening the rupee against the US dollar in the medium term.
The Exchange Companies Association of Pakistan (ECAP) reported that the currency remained unchanged at Rs284.50/$ for the second successive day in the open market.
The recent wave of mergers and acquisitions in the country, including PTCL’s acquisition of Telenor for around $400 million, funded through external financing, has also contributed to positive sentiment in the currency markets. Earlier, Saudi Arabia’s energy giant Aramco announced a $100 million investment in a Pakistani retail energy firm, GO.
Published in The Express Tribune, December 15th, 2023.
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