KARACHI: The rupee extended its gains for a fifth straight session in the interbank market on Monday, as better supplies stemming from dollar sales by exporters outpaced demand from importers for US dollars.
The rupee was also buoyed by optimistic sentiments towards Pakistan's economy. The rupee rose 0.15 percent to close at 284.53 versus the dollar. In the open market, the rupee gained 50 paisas to settle at 285.50 against the dollar.
"The inflows into the interbank market continue to outpace outflows. That’s why the currency is appreciating,” said Samiullah Tariq, the head of research at Pak-Kuwait InvestmentCompany.
The rupee has gradually strengthened versus the dollar, according to another analyst, who also noted that there are some encouraging economic data and anticipation for the approval of the next tranche of the $3 billion loan programme from the International Monetary Fund’s executive board.
The decrease in the trade deficit, a slight uptick in the foreign exchange reserves, the US dollar's depreciation against other major currencies, and optimistic perceptions regarding the IMF's upcoming disbursement for Pakistan, according to Sana Tawfik, an analyst and economist at Arif Habib Limited, have all contributed to the current surge in the value of the rupee.
Pakistan’s trade gap narrowed by 32 percent year-on-year to $1.89 billion in November. The foreign exchange reserves held by the State Bank of Pakistan increased by $77 million to $7.257 billion in the week ending November 24. The country’s total reserves rose by $91 million to $12.393 billion.
In addition, there have been notable developments in the effort to attract investment from Saudi Arabia, as sources suggest that a free trade agreement has been finalised. Investment opportunities from Gulf nations are expected to arise as a result of this development.
Despite this optimistic scenario, a recent IMF development has raised doubts about when the next payout of about $700 million will be made. The IMF board has set meetings through December 14, 2023, however, Pakistan is not on the agenda for this month's board meetings. The total amount disbursed by the IMF will reach $1.9 billion if the due tranche is approved by its board.