KARACHI: The US dollar on Wednesday showed some resistance and managed to make a slight gain against the rupee breaking its 13-day rally triggered after the announcement of appointing Ishaq Dar as the new finance minister.

The local currency appreciated by almost Rs22, or 10.1 per cent, against the greenback in the last 13 sessions.

Currency dealers said that the dollar gained 9 paise to close at Rs217.88 compared to Rs217.79 a day earlier in the interbank market.

However, they were not sure whether the reversal in the exchange rate trend will sustain or not.

“The slight appreciation may be the result of some large import payments made by three big banks on Wednesday which suddenly increased demand for the greenbacks,” said Atif Ahmed, a currency dealer in the interbank market.

He said importers are still wandering to open letters of credit (LCs) since the State Bank of Pakistan is very cautious about imports. Each bank usually sends a list of importers’ requirements and the central bank decides which imports should be allowed,” he explained.

“This is the way exchange rate is being controlled nowadays,” he remarked.

The rupee going against the wind even though the US dollar is getting stronger against all major currencies. Experts said the sentiments are still in favour of the rupee as the finance minister has repeatedly been saying the rupee is undervalued and the dollar should be below Rs200.

Mr Dar’s previous record shows that he would try his best to bring down the dollar value despite no stronger position of foreign exchange reserves.

“Hopes are high in the market regarding the restructuring of $23 billion Chinese loans for one year would ease the situation for Pakistan,” said another currency expert.

Pakistan is also hopeful of receiving $4bn committed by World Bank, Asian Development Bank and the United Nations for flood relief operations.

The open market reported Re1 appreciation in the dollar’s price to close at Rs220.

Published in Dawn, October 13th, 2022