Rupee hits three-week high on improved dollar supply

Gains momentum with rising foreign reserves, exports and remittances

KARACHI:

The Pakistani rupee appreciated by Rs0.07, reaching a three-week high of Rs277.67 against the US dollar in the interbank market on Friday, driven by a surge in the supply of the greenback compared to demand. This marked the rupee's third consecutive day of gains.

According to the State Bank of Pakistan's (SBP) data, the domestic currency has strengthened by Rs0.26 over the past three days.

The Exchange Companies Association of Pakistan (ECAP) reported that the rupee also ticked up by Rs0.09 in the open market on a day-to-day basis, closing at Rs278.65.

The recovery follows a report by the central bank on Thursday, which revealed that Pakistan's foreign exchange reserves, held by the SBP, rose by $84 million on a weekly basis, climbing to a 31-month high of $11.26 billion. The reserves have now increased for the sixteenth consecutive week. The SBP is enhancing reserves by absorbing the surplus supply of dollars, supported by robust inflows from workers' remittances and an improvement in export earnings.

Icon Management's Senior Analyst Hassan Haider attributed the rupee's recent gains to the improved supply of dollars in the market. "Currency-swap values are strengthening, reflecting better greenback supply," he said.