Rupee stable at 277.94/$

Currency stays at 5-1/2-month high on better dollar supply

KARACHI:

Pakistani currency on Monday closed stable above five-and-a-half-month high at Rs277.94 against the US dollar in the inter-bank market, maintaining its uptrend for the 13th consecutive working day.

According to State Bank of Pakistan’s (SBP) data, the rupee ticked up Rs0.01 against the greenback on a day-on-day basis and remained at the five-and-a-half-month high amid better supply of the foreign currency compared to its demand in the banking system.

The currency has cumulatively increased 10.49%, or Rs29.16, in the past over six and a half months compared to the record low close at Rs307.10/$ touched in the first week of September 2023.

Exchange Companies Association of Pakistan reported that the rupee remained stable in the open market as well, closing unchanged at Rs280.20/$ on a day-on-day basis.

The rupee stability came after the central bank extended the deadline for currency exchange companies for the import of US dollars, against the export of other major global currencies, till June 30, 2024 from December 31, 2023. Earlier, the SBP allowed them to import 50% of US dollars in cash, believing the measure would “ensure adequate supply of US dollar cash in the open market.” Companies would import the remaining 50% of dollars through online transactions into their accounts maintained in Pakistan and sell them in the inter-bank market, it was learnt.

Some dealers believe there is still room for further strengthening of the currency to Rs250-260/$ in the coming months despite the widening of trade deficit in March.

Gold continued to shine, hitting a new six-and-a-half-month high at Rs237,600 per tola (11.66 grams) in line with the global trend. Bullion price rose in the local market after it soared $24 in the international arena and reached the high of $2,278 per ounce (31.10 grams) amid anticipation of a likely reduction in the US rate soon.

Published in The Express Tribune, April 2^nd, 2024.

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