Pakistani rupee continues to recover, closes at 175.92

• Recovery is supported by weak dollar demands for import payments.
• Rupee finishes with a gain of 0.09% day-on-day against the US dollar.
• Traders believe rupee is expected to remain stable this week.

KARACHI: Pakistan's rupee has shown strength against the US dollar, closing at 175.92 in the inter-bank market on Monday.

The recovery was supported by a weak dollar demand for import payments and exporters' forward selling of the greenback.

The rupee appreciated as much as 175.5 in intra-day trading but ended with clipped gains. According to data released by the State Bank of Pakistan (SBP), the rupee finished with a gain of 0.09% or 15 paisas day-on-day against the US dollar.

Traders believe that the Pakistani rupee is expected to remain stable against the greenback because of improved dollar liquidity from export proceeds this week.

Investors, however, are still expected to remain cautious until the International Monetary Fund's (IMF) $6 billion loan programme review is scheduled to be held later this month.

A currency dealer said: “Although, the rupee has room to consolidate its gains against the US dollar due to decent inflows from exporters and remittances, and insignificant importer demand, we expect the local unit to trade cautiously as traders and investors await further clarity on IMF front.

The local currency has recovered nearly 1.32% after touching an all-time low of Rs178.24 on December 20, 2021.

With a fresh rise of 0.09%, the rupee has depreciated by 11.66% (or Rs18.38) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

The rupee has maintained the downtrend for the past eight months. It has lost 15.53% (or Rs23.65) to date, compared to the 22-month high of Rs152.27 recorded in May 2021.