Rupee continues to gain ground against the US dollar

By
Business Desk

November 17, 2021

— AFP/File
— AFP/File 

  • The local currency closed the day at 173.76 against the US dollar in the interbank market.
  • With a fresh increase of 0.65%, the rupee has gained Rs1.97 or 1.12% against the US dollar over the last three days.
  • Currency dealers say the local unit continued to gain ground due to tepid dollar demand from importers.

KARACHI: The rupee rose again on Wednesday, extending gains for the third straight session on the back of a slowdown in speculative buying of the US currency.

According to data released by the State Bank of Pakistan (SBP), the local currency closed at 173.76 against the US dollar in the interbank market, compared with Tuesday’s close of 174.89, gaining Rs1.13.

Currency dealers said the local unit recovered due to tepid dollar demand from importers, who had rushed to buy the greenback in previous sessions.

With a fresh increase of 0.65%, the rupee has gained Rs1.97 or 1.12% against the US dollar during the last three days. The local currency closed at an all-time low of Rs175.73 against the greenback on November 12.

According to dealers, a statement from Adviser to the Prime Minister on Finance and Revenue Shaukat Tarin helped discourage speculative buying in the rupee.

Tarin on Sunday had said talks between the International Monetary Fund (IMF) and the government had reached a conclusion and the IMF would soon announce the resumption of its loan programme.

The dealer hoped that the rupee will strengthen further in the coming days in anticipation of the revival of the loan programme and a $3 billion safe deposit from Saudi Arabia expected this week.

On Tuesday, AA Commodities Director Adnan Agar had noted that there was quite a lot of uncertainty regarding the IMF programme.

“The IMF programme has been taking time because of a condition regarding the autonomy of the State Bank of Pakistan (SBP),” he had said, adding that a delay in the deposit of $3 billion funds from Saudi Arabia also contributed to the uncertainty.

The analyst had said that the recovery came on the back of “profit-taking” as the government assured the nation that the funds from Saudi Arabia will be deposited soon.

Agar, however, added that if uncertainty continues till next week, the currency will lose further ground.

He had predicted that the currency will close the calendar year 2021 above Rs170.