US dollar depreciates to six-week low against rupee

• Rupee continues to recover for 15th consecutive session.
• Local unit gains Re0.9 against greenback in interbank market.
• PKR closes at Rs290.86 after appreciating 0.31% from Friday's close of Rs291.76.

The US dollar continued to depreciate in the interbank market on the first day of trading this week on Monday amid a crackdown against foreign currency smugglers and illegal currency trade by the authorities.

The local unit gained Re0.9 against the greenback in the interbank market today. The PKR closed at Rs290.86 after appreciating 0.31% from Friday's close of Rs291.76, according to the latest figure shared by the State Bank of Pakistan (SBP) on its official X handle, formerly known as Twitter.

During the past two weeks, the greenback shed its value by Rs16.40 from its highest level against the rupee. In the open market, the US dollar dropped by 5 paisa to Rs293.

‘Rupee’s appreciation might not sustain’

Talking to Geo.tv, capital market expert Saad Ali said that the recent appreciation of the rupee was majorly driven by the government’s crackdown against the illegal currency trade.

The analyst did not see any fundamental reason behind the flight of the local unit against the greenback. “I feel that it might not sustain for very long.”

Responding to a question, Ali said that he did not think that the dollar would fall to Rs250, adding that it might just come down to the level where the rupee was when the caretaker government took over.

“Dollar might come down to around Rs285,” he added.

Last week, Sindh Governor Kamran Khan Tessori claimed that the market will see a further decline in the dollar rate, adding that the greenback will fall to Rs250-255 against the local unit in the coming days.

During the last week, the local unit appreciated another 1.74% and settled at 291.76 against the greenback. Experts see administrative and enforcement measures behind the recent significant recovery of the rupee's value against the US dollar.

Taking to his X handle, brokerage house Arif Habib Limited’s (AHL) CEO Shahid Ali Habib said: “PKR gained over 5.3%, or Rs15.3 against USD in the last thirteen consecutive trading sessions due to strict measures against Afghan transit and hawala.”

“We expect PKR to further gain in coming days to at least reach Rs278-280 against USD, if these positive measures continue like this and some external flows materialise timely,” Habib added.

However, according to the Forex Association of Pakistan (FAP), the buying and selling rates of the dollar in the open market stood at Rs291.1 and Rs294, respectively.