Rupee reaches nearly 2-month high

Maintains uptrend for 11th day in a row, hits 282.20/$

KARACHI:

Pakistani currency hit almost two-month high at slightly above Rs282 against the US dollar in the inter-bank market on Wednesday, maintaining its uptrend for the 11th consecutive working day amid improved supply of the greenback.

According to State Bank of Pakistan’s data, the rupee appreciated 0.06%, or Rs0.17, and closed at Rs282.20 against the greenback. The currency has cumulatively gained 1.22%, or Rs3.44, in the past five weeks, signalling importers are purchasing a lesser amount of US dollars compared to the sale of export proceeds by exporters in the market.

Exchange Companies Association of Pakistan reported that the rupee rose Rs0.56 to Rs283.20/$ in the open market. Market talk suggests that the currency has gradually improved in the wake of government’s strategy to keep the current account balance at breakeven by limiting imports to levels equal to the sum of export earnings and workers’ remittances.

Read Rupee to range between 297 and 321 per dollar by June-end

The current account balance registered a nominal surplus of $8 million in November after recording manageable deficits in the prior four months.

The rupee made gains ahead of the IMF's executive board meeting scheduled for January 11, 2024

Furthermore, the government on Wednesday raised almost Rs2 trillion in financing through the auction of three to 12-month treasury bills (T-bills), which constituted four times the auction target of Rs500 billion. Banks offered total financing of Rs2.79 trillion. They offered a higher amount for the longer-tenure (12-month) papers ahead of a potential reduction in the rate of return from early 2024, locking returns at 21.4%. Cut-off yields remained unchanged at 21.44% for three-month papers and at 21.39% for six-month bills.

Published in The Express Tribune, December 28^th, 2023.

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