The rupee maintained its momentum against the dollar in the interbank market on Wednesday, increasing by Rs1.06 according to the State Bank of Pakistan.

The rupee has seen an upsurge in confidence as news of stringent administrative measures taken against black market dollar outflows to Afghanistan and Iran came to light.

Trade for the dollar closed at Rs288.75 in the interbank, 0.36pc lower than yesterday’s close of Rs289.80.

The rupee appreciated in the open market as well, rising by Rs1 against the greenback. The dollar was being traded at Rs290, according to the Exchange Companies Association of Pakistan.

Komal Mansoor, head of strategy at financial services platform Tresmark, credited the appreciation of the rupee to the unchanged interest rate by the State Bank of Pakistan in the recent monetary meeting despite expectations of an increase in interest rate by 200 basis points.

She said, “Significant correction in swaps, especially in the short tenors, has led to premiums declining from 18 per cent to near zero.”

This, she added, sent exporters into a flurry “to sell-forwards in response to an appreciating rupee.”

Furthermore, banks engaged in forward-selling transactions to realise their own goals, “however, the bulk of the decline in swaps came from banks engaging in buy-sell transactions to generate dollar liquidity to fulfil import demand”.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

One year on

One year on

Governance by the ruling coalition has been underwhelming and marked by growing authoritarianism.

Editorial

Climate funding gap
Updated 17 Feb, 2025

Climate funding gap

Pakistan must boost its institutional capacity to develop bankable climate projects.
UN monitoring report
17 Feb, 2025

UN monitoring report

THE latest report of the UN Security Council’s sanctions monitoring team paints a grim picture of the banned...
Tax policy reform
17 Feb, 2025

Tax policy reform

THE cabinet’s decision to create a Tax Policy Office at the finance ministry has raised hopes that tax policy is...
Maintaining balance
Updated 16 Feb, 2025

Maintaining balance

It must take a more proactive approach to establishing Pakistan’s bona fides.
Welcome return
16 Feb, 2025

Welcome return

IT is almost here; the moment Pakistan has long been waiting for — the first International Cricket Council...
Childhood trauma
16 Feb, 2025

Childhood trauma

BEING a child in this society should not be so hard. But recurrent reports of child abuse — from burying girl...