Rupee breaks five-day losing streak

Gold reaches new six-month peak at Rs228,150 per tola

KARACHI:

Pakistani currency on Thursday appreciated Rs0.07 to Rs279.28 against the US dollar in the inter-bank market, ending a five-day losing streak, though the central bank reported that its foreign currency reserves had shrunk to $7.89 billion.

On the other hand, gold hit a new six-month high at Rs228,150 per tola (11.66 grams) in a rally fuelled by the record high reached in the global metals market for the second consecutive day.

According to State Bank of Pakistan’s (SBP) data, the rupee ticked up to Rs279.28 against the greenback compared to Wednesday’s close at Rs279.35/$.

Taking cue from the inter-bank market, the currency gained Rs0.26 to Rs281.74/$ in the open market.

The recovery in the two markets came after the government geared up to hold talks with the International Monetary Fund (IMF) for a new loan programme of around $6-8 billion after completion of the ongoing $3 billion standby arrangement in April 2024.

However, the foreign exchange reserves, held by the SBP, decreased $54 million to over two-month low at $7.89 billion in the week ended March 1, 2024, according to the latest weekly update released on Thursday. The forex reserves dropped “due to debt repayment”, the SBP said.

However, the foreign currency reserves held by commercial banks edged up to $5.12 billion compared to $5.08 billion a week ago.

Accordingly, the country’s total liquid reserves stood at $13.02 billion in the week under review compared to $13.03 billion in the prior week.

The gold price surged Rs2,750 on Thursday to a new six-month high at Rs228,150 in the wake of an increase of $26 per ounce (31.10 grams) in the international market to a new record high at $2,174, according to the All Pakistan Saraf Gems and Jewellers Association.

Association member Abdullah Abdul Razzak said Israeli aggression on Palestinian civilians had continued to worsen the geopolitical situation in the Middle East. “This uncertainty forced global investors to park their savings in gold, which is termed a safe-haven asset,” he said.

Published in The Express Tribune, March 8^th, 2024.

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