Rupee hits 10-week high against US dollar

Reaches nearly Rs281.50/$, marking 3rd consecutive day of gains

KARACHI:

The Pakistani rupee strengthened to almost Rs281.50 against the US dollar, achieving a 10-week high in the interbank market on Friday. The uptrend continued for the third consecutive working day, with a notable boost in foreign currency inflows contributing to the positive momentum.

State Bank of Pakistan (SBP) data revealed a 0.10% increase, equivalent to Rs0.27, bringing the closing rate to Rs281.40 against the greenback. Over the past five weeks, the currency has seen a cumulative surge of 1.50%, or Rs4.24, providing relief against imported inflation.

Read Rupee continues upward trajectory

In the open market, the Exchange Companies Association of Pakistan (ECAP) reported a 0.06% rebound, with the currency closing at Rs282.36/$. This positive trajectory followed reports of official inflows totalling $464 million, leading to a rise in the country’s foreign exchange reserves held by the SBP to a five-and-a-half-month high of $8.22 billion.

Multilateral creditors, including the Asian Infrastructure Investment Bank, World Bank, and Asian Development Bank, were cited as sources of the unexpected inflows. The additional funds enhanced Pakistan’s capacity for timely import payments and foreign debt repayments.

The financial markets had anticipated these inflows after the International Monetary Fund executive board’s final approval for a $700 million loan tranche to Pakistan on January 11, 2023. However, the inflows arrived earlier, surprising the markets.

In a separate trend, gold prices continued their downward trajectory, decreasing by 0.55%, or Rs1,200, to reach Rs217,000 per tola (11.66 grams) in Pakistan on Friday. The decline, observed for the third consecutive working day, resulted in a cumulative drop of almost 2%, or Rs4,300 per tola, over the past three days.

The decrease is attributed to a global downtrend, with gold falling by $9 to $2,058 per ounce (31.10 grams) on Friday, according to the All Pakistan Sarafa Germs and Jewellers Association.

 

Published in The Express Tribune, January 6^th, 2024.

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