KARACHI:
On the back of Pakistan’s request to the International Monetary Fund (IMF) for a bigger bailout package of $8 billion, the rupee on Friday hit a three-week high of Rs 278.20 against the US dollar in the interbank market.
According to State Bank of Pakistan (SBP) data, the Pakistani currency gained Rs 0.19 compared to Thursday’s close of Rs 278.39 against the dollar.
The currency has appreciated by a net 10.39%, or Rs 28.90, in the last nine months compared to its all-time low of Rs 307.10/$ in the first week of September 2023.
The rupee has staged a smart rally on the assumption that a large sum in multilateral aid will provide financial leeway for the government to let the economy run smoothly without constraints such as import curbs and help improve its ability to repay foreign debt on time debt.
The local currency was also supported by a $16 million rise in the country’s foreign exchange reserves to $9.11 billion last week, which meant the dollar’s supply was higher than demand for imports and other purposes.
The rupiah is expected to remain flat in the coming weeks on the back of a significant 54% rise in workers’ remittances to hit a record high of $3.2 billion in May 2024 compared to the same month last year.
Apart from this, hopes of fresh investment from China will keep the rupee strong.
The Exchange Companies Association of Pakistan (ECAP), however, reported that the rupee lost a notable Rs 0.33 on a daily basis in the open market, falling to Rs 280/$ for the first time in two months.
Published in The Express Tribune, June 8u2024.
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