KARACHI: The rupee snapped its 13-session winning streak as it lost three paise against the US dollar to Rs281.89 in the interbank market on Tuesday.
However, market experts said the meagre gain didn’t reflect a comeback of the bullish dollar which hit an all-time high of Rs307 against the local currency on Sept 5, 2023.
“The depreciation is negligible and does not indicate that the dollar will keep appreciating against PKR,” said Atif Ahmed, a currency dealer in the interbank market.
However, he maintained, that the exchange rate stability remained unhurt despite the rupee losing three paise. During the last 13 sessions, the rupee appreciated by just Rs2.04 against the greenback.
Currency experts believe that several factors have supported the exchange rate along with administrative measures. The State Bank of Pakistan had succeeded in keeping the foreign exchange reserves around $7bn which jumped by $853m in the second last week of December.
Also, the narrowing trade gap with a growth in exports, positive signals from the IMF tranche and the crackdown against illegal currency business all contributed to exchange rate stability.
“A major step was restricting banks to arrange dollars themselves before opening any letter of credit for import,” said a banker.
“There is a possibility that the rupee once again starts showing strength in coming days since Pakistan has qualified for the last tranche of $1.2bn under the $3bn SBA in March this year,” said a senior analyst.
However, the analyst said the surging inflation could be a hurdle in the IMF board meeting scheduled for Jan 11.
Published in Dawn, January 3rd, 2024
