Rupee uptrend continues

KARACHI: Pakistani rupee gained further on Thursday, with dealers expecting the local unit to maintain an upwards trajectory in the coming days on account of lower dollar demand from importers and increased incoming export payments.

In the open market, the domestic currency rose three rupees to close at 226 per dollar, whereas in the interbank market, it closed at 226.15/dollar, compared with 228.80 on Wednesday.

This uptrend marked a 1.17 percent appreciation in the value of the rupee against greenback in the interbank market.

“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 said.

“Expectations that the International Monetary Fund’s (IMF) Extended Fund Facility bailout programme will be revived also boosted sentiments,” the dealer added. Currency dealers see the rupee consolidating gains, trading at 210 per dollar in the next couple of weeks.

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 percent—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 percent 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, Pakistan Bureau of Statistics reported. The decline in imports was attributed to a ban on some items and lower petroleum imports.