KARACHI: The news-driven speculative currency market reacted quickly to reports of the likely revival of the IMF programme as a result the rupee appreciated by 70 paise on Monday in the interbank market.

The prevailing optimism about the IMF-Pakistan talks in the United States allowed the currency market to slightly change the mood of the exchange rate. However, there was no concrete outcome of the meeting but the hopes were used by the market to play with the speculations and the market could see the appreciation of the dollar in coming sessions.

Currency dealers believe that the rupee did not appreciate due to any support, instead, the meeting with IMF was used to depreciate the dollar. The dollar’s closing price was Rs186.05 with a loss of 70 paise. The dollar on Saturday closed at Rs186.75.

During the last couple of months, the rupee-dollar exchange rate experienced a series of volatile massive price fluctuations and the local currency emerged as a loser.

The State Bank of Pakistan reported last Saturday that the March current account deficit (CAD) widened by $1 billion taking the figure to $13bn in the first three quarters of the current fiscal year.

For currency experts, the expansion in CAD was enough to bring down the local currency but surprisingly it managed to make a 70-paise recovery against the dollar the very next session.

Foreign direct investment in March noted a net outflow while inflows in domestic bonds also dried up to zero in the ongoing month so far reflecting a bad image for the foreign investors.

Published in Dawn, April 26th, 2022