Pakistani currency ticked down Rs0.12 and settled at Rs277.64 against the US dollar in the inter-bank market on Monday, in a depreciation apparently caused by slowdown in supply of the greenback.
The rupee receded from a six-month high touched over the weekend. Market talk suggests exporters have slowed down sales of US dollars (export proceeds) on future counters after a notable drop in premium on one-month and two-month forward counters, resulting in thin supply of the greenback in the market late last week. Later, the premium improved, but it was still lower than the highs seen before Pakistan won approval of a new International Monetary Fund loan programme of $7 billion and received its first tranche of $1.03 billion in late September 2024.
According to the State Bank of Pakistan's (SBP) data, the local currency strengthened a net Rs1.25 (or 0.45%) over the past one month, hitting a six-month high at Rs277.52/$ on Friday compared to the six-month low of Rs278.77/$ touched in the first week of September.
Exchange Companies Association of Pakistan (ECAP) reported that the rupee appreciated Rs0.15 to Rs279.69/$ in the open market compared to Friday's close at Rs279.84/$.
The inter-bank market, however, ignored a consistent growth in Pakistan's foreign exchange reserves over the past 10 months, when they reached a 30-month high at $10.70 billion.
In addition, market talk indicates inflows of remittances, sent home by overseas Pakistanis, are expected to remain robust at around $3 billion for the third consecutive month in September.
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