KARACHI: The rupee continued to reclaim the lost ground against the dollar in the foreign exchange market on hopes of inflows, upbeat trade data, and bets that the new foreign minister would be able to tame the US currency effectively, dealers said on Wednesday.
The local currency appreciated 1.70 rupees or 0.76 percent versus the dollar in the interbank market.
It closed at 223.94 per dollar, compared with 225.64 on Tuesday.
In the open market, the currency gained 1.50 rupees to finish at 227 per dollar.
“In my view, recent encouraging trade balance data, hopes from multilateral institutions of additional inflows supported the rupee,” said Samiullah Tariq, the head of research at Pak-Kuwait Investment Company.
“The 215-220 per dollar seems a good level,” Tariq added.
The trade deficit fell 31 percent year-on-year to $2.88 billion in September, according to data from the Pakistan Bureau of Statistics.
Exports slightly fell 1 percent to $2.39 billion in September from $2.41 billion a year earlier.
Imports declined 20 percent year on year to $5.27 billion. The deficit in the first quarter (July-September) of FY2023 narrowed 21.4 percent to $9.2 billion against $11.72 billion in the same three months of the last year.
The rupee maintained its upward trend. Finance Minister Ishaq Dar’s statement “the actual value of the rupee was less than 200 and it would be brought down, as it was currently undervalued” further bolstered the currency as the dollar sales by the exporters continued to underpin sentiment and improve supplies in the market.
The governor State Bank of Pakistan (SBP) informed the National Assembly’s Standing Committee on Finance that action would be taken against banks and forex exchange companies involved in creating volatility in the exchange rate upon the finalisation of the inquiry.
The committee wanted to know the names of the eight banks that were allegedly involved in speculation for making money and there was a considerable difference in dollar rate in the interbank and exchange companies rate.
The committee directed the SBP to take appropriate action against all the banks and exchange companies allegedly firing up exchange rate volatility.
The committee also asked the SBP to take exemplary action against banks and exchange companies involved in speculations to make a profit so that no one could dare to play with the economy of the country in the future.