Pakistani currency bounced back on Tuesday and appreciated Rs0.12 to Rs278.12 against the US dollar in the inter-bank market after a visiting Saudi business delegation reaffirmed investment commitment of billions of dollars.
According to the State Bank of Pakistan’s data, the rupee had closed at Rs278.24 on Monday.
The local currency has gained 10.42%, or almost Rs29, in the past eight months since reaching the record low close at Rs307.10/$ in the first week of September 2023.
Market talk suggests that exporters were selling dollars in higher quantities on forward currency counters, believing that the rupee would gain further ground on the back of reports that Saudi Crown Prince Muhammad bin Salman would arrive soon to further cement the investment accords valuing at over $5 billion.
Inflows of foreign investment will increase supply of the greenback in the country. They will also give a boost to Pakistan’s foreign exchange reserves and shield the rupee against any future onslaught from the US dollar.
The Exchange Companies Association of Pakistan reported that the rupee extended gains by Rs0.29 and closed at Rs279.09/$ in the open market. The strengthening of the local currency in retail trade indicates that the supply of the US dollar has improved compared to its demand.
Currency dealers pointed out a day ago that the expected increase in inflows in a day or two would help the rupee regain some lost ground.
Published in The Express Tribune, May 8th, 2024.
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