Saturday December 02, 2023

PKR to Dollar: Rupee appreciates further as Pakistan slowly recovers from economic crisis

Dollar closes at 224.04 after losing 2.11 in interbank market

By Riaz Andy
August 05, 2022
A representative image.
A representative image.

KARACHI: The Pakistani currency gained further ground Friday against the US dollar in the interbank market as the country slowly recovers from the currency crisis amid hopes of the revival of the International Monetary Fund’s (IMF) loan programme.

The local unit closed at 224.04 after gaining 2.11, or 0.94%,  in the interbank market. It appreciated 2.65 or 1.17% against the dollar to close at 226.15 on Thursday. 

Forex traders have linked the development to multiple factors and see the rupee consolidating gains, trading at 210 per dollar in the next couple of weeks.

“There have been no major import payments in the last day or two. Exporters are coming to sell dollars in forward. These factors increased supplies, supporting the rupee,” a currency dealer told The News on Thursday.

“Expectations that the International Monetary Fund’s (IMF) Extended Fund Facility bailout programme will be revived also boosted sentiments,” the dealer added.

The State Bank of Pakistan (SBP) expects the IMF board to approve a staff-level agreement with the country in the third week of August.

Pakistan’s currency saw its best day ever on Wednesday, when it rose by Rs9 against the US dollar. It strengthened 4% — the highest single-day gain since 1999.

The positive statement from the IMF, soft dollar demand from importers to make payments, and greenback selling by exporters shored up the beaten-down currency.

July trade numbers reduced pressure on the rupee, improving the outlook for the country’s fragile current account balance.

The country’s trade deficit also fell 47% month-on-month to $2.6 billion in July, driven by a drop in imports.

Total imports dropped to $4.9 billion in July 2022 from $7.9 billion in the previous month, the Pakistan Bureau of Statistics reported. The decline in imports was attributed to a ban on some items and lower petroleum imports.