KARACHI
Pakistani rupee strengthened against the US dollar in the interbank market for the second straight session on Wednesday by Rs1.09 (+0.39 percent) .
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 278.57 against the dollar in the interbank market and closed at 277.48. The rupee appreciated by Rs1.24 against the US dollar in Tuesday’s interbank session
Similarly, the local unit appreciated against the greenback in the open market by Rs3 (+1.07 percent). The rupee was quoted in the range of 278-279 against the dollar in the open market as compared to 281-284 a session earlier. In the black market/Hundi, the dollar was quoted at Rs295 against Rs298 a session earlier.
During the recently started fiscal year 2023-24, Pakistani rupee has gained Rs8.51 against the US dollar in the interbank market, while it plummeted by Rs50.05 against the greenback in the current year.
The rupee started strengthening against the US dollar after Finance Minister Ishaq Dar announced a day earlier that the State Bank of Pakistan (SBP) received $2 billion from Saudi Arabia. In a video message, the finance minister said more positive developments pertaining to the economy are expected in the coming days.
The country’s low level of foreign exchange reserves got a boost after the Saudi inflow. Last month, Pakistani authorities managed to clinch a last-minute staff-level agreement with the IMF on a $3 billion nine-month SBA. The development was expected to pave the way for further funding from other multilateral and bilateral partners.
The IMF agreement already resulted in Fitch Ratings upgrading Pakistan’s sovereign rating to ‘CCC’ from ‘CCC-’ on Monday last, providing some respite to investors in the nation’s stocks and bonds. Following the announcement of the Saudi help, Pakistan’s sovereign dollar bonds increased in value by as much as 1.8 cents, according to data from Tradeweb.
However, the rupee’s surge is predicted by some analysts to be temporary. Given that imports appear to be only partially open, the currency appears to trade range-bound in the short term. According to commentators, banks won’t open fresh letters of credit unless there are enough dollar inflows in the nation.
