Thursday Dec 30 2021

Rupee records highest single-day recovery after a hiatus of 31 sessions

— AFP/File
— AFP/File

  • Pakistani rupee appreciates around 0.41% to settle at Rs177.51.
  • "This is the highest recovery after 31 sessions," AHL reports.
  • Rupee has depreciated by 12.67% since the July 1, 2021.

KARACHI: The Pakistani rupee rebounded on Thursday, sharply recovering to Rs177.51 against the US dollar in the inter-bank market after the hopes of resumption of $6 billion International Monetary Fund (IMF) programme strengthened investors confidence.

The local currency appreciated around 0.41% (or Rs0.89) to settle at Rs177.51 in the inter-bank market. The local currency had closed at an all-time low of Rs178.24 against the greenback on Wednesday.

According to Arif Habib Limited, the Pakistani rupee recovered 0.41% day-on-day, closing at 177.51. "This is the highest recovery after 31 sessions," the brokerage house added.

The rupee has maintained the downtrend for the past seven months. It has lost 16.57% (or Rs25.24) to date, compared to the 22-month high of Rs152.27 recorded on May 14.

With a fresh rise of 0.41%, the rupee has depreciated by 12.67% (or Rs19.97) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

Currency dealers had earlier said that recent measures taken by the State Bank of Pakistan (SBP), i.e., tightening of the regulations related to foreign currency buying and the frequent liquidity injections in the banking system have helped stabilise the rupee.

However, the fulfilment of the conditions imposed by the International Monetary Fund (IMF) as prior action before the sixth review of the $6 billion worth extended fund facility due on January 12 would be watched for cues.

Traders are also likely to monitor how the government brings down the trade deficit in the coming months.

Analysts expect the trade gap to widen further in the months to come, but the government is optimistic about trade balance prospects amid healthy remittances.

“The expected developments in export and import activities imply that the trade balance may gradually improve in the coming months and settle down at significantly lower levels in the second half of the current fiscal year,” said the Monthly Economic Update and Outlook December 2021, published by the finance division two days ago.