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Tuesday November 29, 2022

Rupee sees minor gain against US dollar in interbank market

The rupee closed at 221.92 after an appreciation of Re0.03 or 0.01% in the interbank market compared to its Thursday’s closing of 221.95 against the dollar

By Web Desk
November 04, 2022
A file image showing a currency dealer counting $100 notes — AFP/File
A file image showing a currency dealer counting $100 notes — AFP/File

KARACHI: The Pakistani rupee finally snapped its multi-day losing steak as it registered a slight gain of 0.01% against the greenback in the interbank market on Friday.

According to the State Bank of Pakistan (SBP), the rupee closed at 221.92 after an appreciation of Re0.03 or 0.01% in the interbank market compared to its Thursday closing of 221.95 against the dollar.

The local unit ended at 221.95 per dollar after losing Re0.52 or 0.23% on Wednesday.

Moreover, the dollar has been gaining against major currencies after Federal Reserve Chair Jerome Powell signalled US interest rates will likely peak at a higher level than markets expected.

On the other hand, the pound sterling sank after the Bank of England raised rates but warned of a "very challenging outlook."

Analysts said the SBP's allowing the exchange companies to trade 20% of remittances in the open market will ease pressure on the rupee.

The SBP on Thursday allowed exchange companies to trade 20% of remittances in the open market to ease pressure on the rupee.

Federal Minister for Finance Ishaq Dar earlier this week announced clearance of Letters of Credit (LCs) up to $50,000, which spiked the dollar demand from importers.

Last week, the exchange businesses requested Dar to allow at least half of the remittances to be used by the open market. They expected that the possibility of receiving half of the remittances would lessen the demand for the dollar and lower its rate in the currency market.

“On our request, the governor State Bank of Pakistan has enabled the exchange companies to sell 20% of workers' remittances to the general public,” said Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP) said in a statement.

Bostan, along with other members of ECAP, held a meeting with governor SBP Jameel Ahmad and thanked him for helping exchange companies whenever they face any problem.

“Due to the low rate of exchange companies, customers are selling in the black market instead of selling to exchange companies as their rate is 10 to 15 rupees more per dollar than exchange companies,” he said.