High reserves prop up rupee further
photo: file
Pakistani currency on Friday appreciated Rs0.08 and closed at Rs278.12 against the US dollar in the inter-bank market after the central bank reported that foreign currency inflows had remained high, which boosted its reserves to a 22-month high.
According to the State Bank of Pakistan’s data, the rupee had closed at Rs278.20 against the greenback on Thursday.
The latest improvement in the currency came after workers’ remittances touched the second highest level in the current fiscal year at $2.8 billion in April 2024.
The inflow of remittances along with the receipt of last International Monetary Fund loan tranche of $1.1 billion boosted Pakistan’s foreign exchange reserves, held by the SBP, to the 22-month high of $9.12 billion in the week ended May 3, 2024, according to the latest weekly update released on Thursday. The two developments apparently helped increase supply of the foreign currency in inter-bank trade with the rupee gaining more strength.
The local currency has cumulatively increased 10.42%, or Rs28.98, in the past eight months compared to the record low of Rs307.10/$ in September 2023.
Market talk suggests the rupee will remain stable near current levels by the end of ongoing fiscal year on June 30, 2024.
Exchange Companies Association of Pakistan, however, reported that the rupee depreciated Rs0.14 to close at Rs279.25/$ in the open market.
Gold price on Friday surged Rs4,600 to an 11-day high at Rs243,800 per tola in line with the rising global trend.
All Pakistan Sarafa Gems and Jewellers Association reported that the precious metal rose $54 to $2,366 per ounce in the international market during the day.
The association stressed that bullion was “under-cost” by Rs3,000 per tola in Pakistan when compared to the international market, though its prices have risen significantly in the past couple of years while purchasing power has eroded.
Published in The Express Tribune, May 11th, 2024.
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