The rupee continued its upward trajectory on Tuesday, appreciating by 95 paisa against the US dollar in the interbank session.
The local currency closed the day's trade at Rs153.09 per dollar, against yesterday's closing of Rs154.04 per dollar.
The rupee traded within a very narrow range of 69 paisa per dollar, showing an intraday high of Rs153.75 and an intraday low of Rs153.10.
In the open market, the rupee was traded at Rs153/154 per dollar (buy/sell).
The Pakistani rupee has been on an uptrend amid increased foreign exchange reserves and improved economic sentiments. "While Emerging Markets currencies are going through a tough time currently, Pakistan rupee has emerged as an unlikely winner so far in 2021," Mattias Martinsson, founder and chief investment officer at Tundra Fonder, said on his Twitter handle.
According to data compiled by Mettis Global, the local unit has so far gained 9.77 per cent or Rs14.96 in FY2021, while appreciation has been 4.40pc or Rs6.74 in CY21 with the rupee heading for a 3.27pc monthly gain.
Having gained Rs5 or 3.27pc against the dollar in March alone, the rupee is currently at a 22-month high and trading at levels last seen in June 2019.
"The revival of International Monetary Fund's program and the approval of $500 million by their board has lent support to the rupee. On top of that, other multilateral organisations including $1.3 billion from the World Bank have further improved the fundamentals," said Malik Bostan, President of the Forex Association of Pakistan.
Speaking of the market dynamics, he said the demand is quite low and is mostly driven for education-related reasons for students studying abroad. However, there is an abundance of supply with exchange companies alone receiving $7-8 million a day at their counters. This liquidity is then deposited in the interbank market.
He also credited the Roshan Digital Accounts for the rupee's recent gains.
Former Secretary General of Exchange Companies Association of Pakistan, Zafar Paracha, seconded this view.
"The State Bank's initiatives are beginning to bear fruit now as an ever greater number of transactions are being routed through formal channels," he said.
Meanwhile, the rupee gained Rs1.9 against the Pound Sterling as the day's closing quote stood at Rs210.85 per GBP, against the previous session's closing of Rs212.79 per GBP.
Similarly, the rupee's value strengthened by Rs1.4 against the euro which closed at Rs179.84 at the interbank today.
Meanwhile, the overnight repo rate within the money market was 7.60/7.75pc towards the close of the session, whereas the one-week rate was 7.10/7.15pc.