Rupee recovers further, stands below 282/$

Gold at 1-month high in line with soaring global market

KARACHI:

Pakistani currency maintained its winning streak for the 12th consecutive working day on Thursday, appreciating to a new two-month high at slightly below Rs282 against the US dollar in the inter-bank market.

It came ahead of the International Monetary Fund (IMF) executive board meeting for approval of the release of second loan tranche of $700 million in January 2024.

At the same time, gold hit a one-month high at Rs222,800 per tola (11.66 grams) in line with the global trend.

According to State Bank of Pakistan’s (SBP) data, the rupee rose 0.10%, or Rs0.27, and closed at Rs281.93 against the greenback. With fresh gains, the currency has cumulatively increased 1.32%, or Rs3.71, in the past five weeks.

Exchange Companies Association of Pakistan reported that the currency appreciated 0.18%, or Rs0.52, in the open market and closed at Rs282.68/$.

Pakistani currency has maintained its rally since a staff-level agreement was reached with the IMF at the successful completion of first review in mid-November under the $3 billion loan programme.

It will clear the way for the disbursement of second loan tranche of $700 million to Pakistan. The IMF executive board is scheduled to give its nod in a meeting slated for January 11, 2024.

Read Rupee reaches nearly 2-month high

The board’s approval is projected to unlock another $1.5-2 billion from other multilateral and bilateral creditors.

The Asian Development Bank (ADB) has already inked an agreement for a financing of $1.2 billion for Pakistan. Besides, the World Bank has recently approved a loan of $350 million.

All Pakistan Saraf Gems and Jewellers Association reported that gold price surged 1%, or Rs2,200, and settled at Rs222,800 per tola.

The local market took cue from the international trend where the precious metal gained almost 1%, or $20, to $2,105 per ounce (31.10 grams), according to the association.

A prolonged geopolitical crisis in the Middle East and likely reduction in the benchmark policy rate in the near future are prompting investors to park their savings in gold, which is considered a safe-haven asset.

Published in The Express Tribune, December 29^th, 2023.

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