Rupee rebounds to six-month high

The Pakistani rupee appreciated by Rs0.05, closing at Rs277.64 against the US dollar, matching last week's six-month high in the inter-bank market. The rise follows increased availability of foreign currency within the system.

According to State Bank of Pakistan (SBP) data, the rupee first hit this six-month high last week after the country received the first tranche of $1.03 billion from the International Monetary Fund (IMF). Although the rupee slightly declined earlier this week due to increased demand for dollars, it rebounded to last week's high on Wednesday.

SBP Governor Jameel Ahmad told media there is ample foreign currency supply in the inter-bank market, ensuring smooth fulfilment of dollar demand for imports and other foreign transactions. He noted that significantly higher inflows from workers' remittances, the Roshan Digital Account (RDA), and improved export earnings have boosted the supply of foreign currency, preventing any major supply-demand pressures.

Pakistan has also cleared its backlog of repatriation of profits and dividends by foreign companies to their headquarters, which, along with higher inflows and moderate outflows, is expected to positively impact the domestic economy, he added.

Ahmad further updated that Pakistan's foreign exchange reserves have surpassed $10.7 billion after receiving the latest loan tranche under the $7 billion Extended Fund Facility (EFF) from the IMF. This increase has pushed reserves to cover over two months of imports, compared to less than one month of import financing in the recent past.

The Exchange Companies Association of Pakistan (ECAP), however, reported that the rupee depreciated slightly by Rs0.04 in the open market, closing at Rs279.88/$ on Wednesday.