Rupee extends gains against dollar

KARACHI: The rupee continued to stage a sharp recovery against the dollar in both the currency markets on Friday on the back of reduced dollar demand from importers and better dollar supplies, traders said.

The local unit rose by 4 rupees, or 1.76 percent, to close at 222 per dollar in the kerb market.

In the interbank market, the rupee ended at 224.04 versus the greenback, where it had closed at 226.15 on Thursday.

During the week, the local currency has appreciated by 6.19 percent against the dollar in the interbank market.

“The rupee continued to gain ground due to lower import payments, dollar selling from exporters, expectations of the release of the International Monetary Fund (IMF), and some ease in political uncertainty,” said a currency dealer.

“There are some reasons that the market is calm. There is good progress going on about the IMF loan programme and the fall in the global oil prices would have a positive impact on Pakistan’s current account deficit,” the dealer added hoping the rupee to gain more in coming days.

The country’s foreign exchange reserves remain under pressure as fell by $206 million to $14.208 billion as of July 29.

The reserves held by the State Bank of Pakistan dropped by $190 million to $8.385 billion.

The IMF’s executive board is expected to approve a staff-level agreement with Pakistan by the third week of August, which would pave the way for the release of $1.2 billion tranche to the country.

The release of the IMF money is likely to trigger other disbursements by multilateral institutions and official bilateral creditors. This along with an expected lower current account gap in the coming months would help the country shore up its foreign reserves and the currency.