KARACHI:
The Pakistani rupee has strengthened against the US dollar for the first time in the last week, dropping below Rs290 for the first time in a week on Tuesday as a result of rising foreign currency inflows.
The local currency has strengthened by another 0.37%, or Rs1.06, reaching a high of Rs289.80 to 1 USD according to data from the State Bank of Pakistan (SBP).
At Rs288.49/$ in the middle of the last month, the rupee is only Rs1.31 away from its value before the interim government.
Including today’s increase, Pakistan’s currency has risen in value by over 6%, or Rs17.30, over the course of the preceding 15 business days.
When Caretaker Prime Minister Anwaarul Haq Kakar took office in the middle of August 2023, the rupee had dropped to Rs288.49/$ from Rs307.10/$ in the first week of September 2023, a loss of almost 6%.
Efforts by the current administration and the central bank to crack down on currency smugglers, speculators, and hoarders appear to have paid off, according to market chatter. The SBP has maintained its policy of suspending the licences of exchange companies suspected of engaging in illegal transactions.
The stricter policies have encouraged more legitimate forms of investment. As the increasing trend continues, exporters are unloading their positions on futures counters in anticipation of a stronger dollar. Official remittances from overseas workers have also been increasing in recent days.
Currency may strengthen to Rs278-280/$ with ongoing clever rally, according to Arif Habib Limited. Gohar Ejaz, the country’s interim minister of trade, had stated that the dollar is currently worth Rs260.
According to the Exchange Companies Association of Pakistan (ECAP), the value of the local currency has recovered by 0.68%, or Rs2, to Rs291/$ on the open market.
In the retail sector, it has gained over 13%, or Rs37, during the course of the past month.
The 0.41 percent (Rs1.20) decline in the margin between the inter-bank and open markets is significantly below the 1.25 percent (nearly Rs4) maximum spread proposed by the International Monetary Fund.
