Rupee gains on World Bank financing boost

KARACHI:

The consolidating Pakistani rupee regained Rs0.12, strengthening to Rs278.50 against the US dollar in the inter-bank market on Tuesday. According to State Bank of Pakistan (SBP) data, the domestic currency had weakened to a three-month low of Rs278.62 against the greenback on Monday. The Exchange Companies Association of Pakistan (ECAP) reported that the local currency gained Rs0.05, closing at Rs280.27/$ in the open market.

The latest recovery coincides with the World Bank approving $535 million in financing for Pakistan, suggesting an increase in the supply of foreign currency. The rupee has appreciated 10.30%, or Rs28.60, in the nine-and-a-half-months to date compared to a record low closing of Rs307.10/$ in the first week of September 2023.

Financial experts anticipate the currency will remain stable around the current level and fluctuate in a narrow band until the end of the current fiscal year on June 30. They noted that the demand for the greenback for imports has remained muted amid a slowdown in industrial output.