Rupee gains for fifth consecutive session, closes at 197.59 against US dollar
June 02, 2022
- Rupee closes at Rs197.59 against US dollar.
- Local unit gains 0.14% in the interbank market.
- Since July 1, 2021 rupee has dropped by Rs40.05.
KARACHI: The Pakistani rupee strengthened for a fifth straight day on Thursday on the back of US dollar selling from exporters, while hopes that Pakistan and the International Monetary Fund (IMF) would reach a staff-level agreement to resume the bailout this month also supported the local unit.
According to data released by the State Bank of Pakistan (SBP), the local currency closed at Rs197.59 in the interbank market, after gaining 0.14%. The rupee closed at Rs197.87 against the greenback a day earlier.
Foreign exchange dealers believe that the liquidity has improved as exporters are bringing dollars to the market which has eased pressure on the currency.
Read more: Inflation clocks in at 13.8% in May
Since the beginning of this fiscal year (July 1, 2021) to date, the rupee has collectively dropped by a massive 25.42% (or Rs40.05) compared to the previous fiscal year’s close at Rs157.54.
The rupee has maintained a downward trend for the last 13 months. It has lost 29.76% (or Rs45.32) to date, compared to the record high of Rs152.27 recorded in May 2021.
The market sentiment is positive as Finance Minister Miftah Ismail hinted, in an interview with CNN, at concluding a seventh review of the IMF-supported Extended Fund Facility after presenting the budget in the early part of June.
Read more: Economic inconsistency and Pakistan's future
Overall in the near term, the forecast regarding the rupee is bullish on receiving the next tranche of $900 million from the IMF’s $6 billion loan facility. This will lead to further bilateral and multilateral funds coming in, helping reduce Pakistan’s default risks on its foreign debts.
In the open market also, the domestic currency closed at 198.5 per dollar, the Forex Association of Pakistan reported.
The rupee bounced back from record losses last Friday after the government hiked fuel prices to meet the IMF loan conditions. The rupee depreciated 6.4% against the US dollar in May.
