Rupee maintains gaining streak, closes below 220 mark against US dollar

KARACHI: The Pakistani rupee maintained its upward trajectory against the US dollar for the third consecutive session in the interbank market on Tuesday, falling below the psychological barrier of Rs220.

According to data released by the State Bank of Pakistan, the local unit closed at 219.73 against the US dollar after gaining Rs0. 68, or 0.31%, compared to Monday's close of 220.41.

The market is anticipating inflows of $1.5 billion from the Asian Development Bank (ADB) this week and $2 billion in the first week of November.

This boosted sentiment on the rupee. Dealers are hopeful that support from multilateral creditors would help boost foreign exchange reserves and the value of the local currency.

The rupee is expected to trade at 216 to the dollar in the next 10 days and 210 to the dollar in the following 30 days, according to Tresmark, a terminal that monitors live prices of financial markets.

“This is because of ADB-related inflows of $1.5 billion in the coming week and $2 billion of inflows in the first week of November. Of course, this would not have been possible without the finance minister’s undervalued rupee mantra,” Tresmark said in a client note. But the real test for the rupee would be six months from now, it added.

However, despite the rupee remaining largely stable in the interbank market hovering around Rs219-220 for almost a week, the rates proved to be meaningless as multiple exchange companies and dealers reported having no dollars with them.

Officials at these companies said the shortage has persisted for almost a week.