- Rupee closes the day at Rs174.48 — the highest since Nov 23, 2021.
- Dealers say that IMF’s announcement boosted sentiment on the rupee.
- “Going forward, rupee is expected to sustain at current levels,” analyst says.
KARACHI: Pakistani rupee continued to recover to a 2.5-month high on Friday as investors remained optimistic after the International Monetary Fund (IMF) approval for disbursement of $1 billion tranche and drop in January trade deficit.
Positive development sparked hopes of pressure subsiding on the balance of payments; resultantly the local currency closed the day at Rs174.48 — the highest since November 23, 2021 — with a fresh increase of 0.60%.
Currency dealers said that the IMF’s announcement strengthened investors’ confidence in the country’s economy, boosting sentiment on the rupee.
Earlier Arif Habib Limited Head of Research Tahir Abbas said: “Approval from the IMF executive board along with lower import and trade deficit numbers for January helped the rupee to gain against greenback.”
“Going forward, the rupee is expected to sustain at current levels with a range-bound outlook,” he added.
A report of Arif Habib Limited stated that the rupee made the highest day-on-day recovery after November 17, 2021.
After posting a fresh gain of 0.60%, the Pakistani rupee has depreciated by 10.75% (or Rs16.94) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.
The rupee had maintained the downtrend for the past nine months. It has lost 14.58% (or Rs22.21) to date, compared to the record high of Rs152.27 recorded in May 2021.
Pakistan-Kuwait Investment Company Head of Research Samiullah Tariq said the sentiment is “positive” and the recovery was in line with the market expectation.
“Moreover, encouraging trade data has also lent support to the rupee,” he said, adding that going forward, the local unit is expected to remain stable.
Meanwhile, the foreign exchange reserves held by the central bank fell 2.86% on a weekly basis.
On January 28, the foreign currency reserves held by the SBP were recorded at $15,727.6 million, down $463 million compared with $16,190.1 million on January 21.
According to the central bank, the decrease came due to external debt and other payments.
Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $22,084.5 million. Net reserves held by banks amounted to $6,356.9 million.