Rupee registers highest one-day recovery after 31 session hiatus

– AFP / File
  • The Pakistani rupee appreciates around 0.41% to settle at Rs177.51.
  • “This is the highest recovery after 31 sessions,” reports AHL.
  • The rupee has depreciated 12.67% since July 1, 2021.

KARACHI: The Pakistani rupee rebounded on Thursday, recovering sharply to Rs 177.51 against the US dollar in the interbank market after hopes of resuming the International Monetary Fund’s (IMF) $ 6 billion program boosted confidence among investors.

The local currency appreciated by around 0.41% (or Rs0.89) to settle at Rs177.51 on the interbank market. The local currency closed at an all-time low of Rs 178.24 against the greenback on Wednesday.

According to Arif Habib Limited, the Pakistani rupee rallied 0.41% overnight, closing at 177.51. “This is the highest recovery after 31 sessions,” added the brokerage.

The rupee has maintained its downtrend for the past seven months. It has lost 16.57% (or Rs 25.24) so ​​far, from the 22-month high of Rs 152.27 recorded on May 14.

With a further rise of 0.41%, the rupee has depreciated 12.67% (or Rs19.97) since the start of the current fiscal year on July 1, 2021, data released by the central bank has revealed. .

Currency traders previously said that recent actions by the State Bank of Pakistan (SBP), namely the tightening of regulations on the purchase of foreign currency and the frequent injections of liquidity into the banking system, contributed to stabilize the rupee.

However, compliance with the conditions imposed by the International Monetary Fund (IMF) as a prior action before the sixth review of the extended $ 6 billion fund facility scheduled for Jan. 12 would be monitored for clues.

Traders are also likely to watch how the government reduces the trade deficit in the coming months.

Analysts expect the trade gap to widen further in the coming months, but the government is optimistic about the outlook for the trade balance amid healthy remittances.

“The expected developments in export and import activities imply that the trade balance could gradually improve over the next few months and stabilize at significantly lower levels in the second half of the current fiscal year,” said the Monthly economic update and outlook for December 2021, released by the finance division two days ago.

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