Rupee appreciates to 5-month high

KARACHI:

Pakistani currency on Wednesday hit almost five-month high at Rs278.78 against the US dollar in the inter-bank market ahead of talks with the International Monetary Fund (IMF) for releasing the last tranche of $1.1 billion and securing a new, larger loan programme.

According to State Bank of Pakistan’s (SBP) data, the rupee gained 0.11%, or Rs0.30, compared to Monday’s close at Rs279.08 against the greenback. With the latest appreciation, the currency has cumulatively risen 10.16%, or Rs28.32, in the past six months since plunging to the all-time low close at Rs307.10/$ in the first week of September 2023.

The Wednesday’s close was the highest level since October 17, 2023, when rupee stood at Rs277.03/$. Market talk suggests that the supply of foreign currency remained higher than its demand as exporters were selling the greenback on futures counters in anticipation dollar inflows would improve following receipt of IMF’s last loan tranche of $1.1 billion in March-April 2024. Moreover, talks for a new and larger IMF loan package will further accelerate the flow of the greenback.

Pakistan received more dollars on account of improved remittances sent home by overseas Pakistanis to their family members and friends back home to help them cope with high inflation during Ramazan and meet Eid expenditures.

According to the Exchange Companies Association of Pakistan, the rupee appreciated Rs0.25 to Rs281.22/$ in the open market. Accordingly, the disparity between the two currency markets further narrowed to Rs2.44 (0.87%) compared to more than Rs3 (over 1%) in the recent past. The IMF has recommended the maximum ceiling of 1.25% (around Rs4).

Gold down

Gold price on Wednesday decreased Rs1,800 to Rs228,300 per tola (11.66 grams) in line with the global trend. The precious metal in the international commodity market dropped $18 to $2,179 per ounce (31.10 grams).

Published in The Express Tribune, March 14^th, 2024.

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