Rupee closes 2021 with third highest single-day recovery

• Local currency appreciates by Re1.
• Rupee has depreciated by 12.04% since July 1, 2021.
• Suspected intervention by SBP helped the local unit recover.

KARACHI: The Pakistani rupee recovered some of its lost value in the interbank market on Friday as the local currency appreciated by Re1 to Rs176.51 against the US dollar.

According to Arif Habib Limited, the Pakistani rupee recovered 0.57% day-on-day, closing at 176.51. "This is the third-highest recovery of the calendar year 2021," the brokerage house added.

The rupee has maintained the downtrend for the past seven months. It has lost 15.91% (or Rs24.24) to date, compared to the 22-month high of Rs152.27 recorded in May.

With a fresh rise of 0.57%, the rupee has depreciated by 12.04% (or Rs18.96) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

Suspected intervention by the State Bank of Pakistan (SBP) helped the local unit recover from the record low hit in the previous session, while approval of the supplementary budget by the cabinet to secure funding from the International Monetary Fund also boosted sentiment.

According to dealers, the central bank had pumped dollars into the market to prevent further fall. It is pertinent to mention here that the local currency dropped to an all-time low of Rs178.24 against the greenback on December 29, 2021.

Analysts said the fulfilment of prior actions to complete the sixth review of the IMF offered some comfort to investors, improving their sentiments on the outlook for the rupee.

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.