Wednesday Jan 12, 2022
KARACHI: The rupee continued to recover against the US dollar in the interbank market on Wednesday.
The Pakistani currency gained 0.23% against the greenback, settling at Rs176.23.
According to data released by the State Bank of Pakistan (SBP), the local unit closed at Rs176.63 against the US currency a day earlier.
Currency dealers believe the rupee gained slightly against the dollar with the help of lower import payments and improved supplies.
“There was a slowdown in dollar demand from importers, while inflows from exporters remained healthy. This sent a rupee a little bit higher,” a currency dealer said.
“There has been a support for the rupee from the improvement in the foreign exchange liquidity in the market as the exporters have started selling dollars,” he added.
With a fresh gain of 0.23%, the rupee has depreciated by 11.86% (or Rs18.69) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.
It is pertinent to mention here that the local unit hit an all-time low of Rs178.24 on December 29.
The International Monetary Fund’s (IMF) approval for the resumption of its $6 billion loan programme looks to be a major trigger for the rupee in the near term as it would unlock financing from the multilateral lenders and the bond issuance in the international market.
The market awaits IMF’s approval for the disbursement of the $1 billion tranche under the Extended Fund Facility (EFF). However, there are media reports that the IMF has asked Pakistan to renegotiate its loan programme when the government approached them for the extension in the process of implementing prior actions, but Islamabad didn’t agree.
The rupee has maintained the downtrend for the past eight months. It has lost 15.73% (or Rs23.96) to date, compared to the 22-month high of Rs152.27 recorded in May 2021.
It is pertinent to mention here that last week, the central bank took an important step to improve the supply of inflows in the market. It asked exporters to bring in proceeds within 120 days instead of 180 days.