KARACHI
Pakistani rupee snapped a two-day losing streak against the US dollar in the inter-bank market with a minimum possible gain of one paisa on Friday.
The State Bank of Pakistan (SBP) said in a tweet that the rupee opened at 278.81 against the dollar in the interbank market and closed at 280.80. The rupee has appreciated by Rs7.19 during the current fiscal year 2023-24, while it has depreciated by Rs49.38 in the current year.
Similarly, the Pakistani rupee recovered Rs2 against the greenback in the open market. The rupee was quoted in the range of 277-280 a dollar as compared to 279-282 in the previous session. The rupee has recovered by Rs52 against the dollar in the last 33 sessions in the open market.
The Pakistani rupee has rebounded from an all-time low to become the world’s top performing currency and there’s still room to strengthen, analysts said.
The currency plummeted to a record low of Rs307 rupees against the greenback in early September. It has since gained around 7 percent against the dollar, marking the strongest bounce among other currencies and outpacing them to become the best performer last month. This was largely owed to a government clampdown on a widespread illicit dollar trade.
“Pakistan’s rupee was the top performer globally this month as a government crackdown on the illegal dollar trade helped reverse its fortunes,” HDFC securities said in a recent report. “A remarkable feat as most currencies including the Thai baht and South Korean won tumbled against the dollar on speculation the US interest-rates will stay elevated for longer,” the report added.
The market experts said the government’s crackdown in the open market against currency speculators and hoarders helped rupee’s recovery. However, the room for further improvement is narrowing as the Real Effective Exchange Rate (REER) is nearing 100. They further said that the currency remains fundamentally vulnerable, as the country has yet to see a significant increase in exports and remittances, while imports remain high.
Meanwhile, the country’s current account deficit declined to $8 million in September 2023 as compared to the current account deficit of $360 million in the same month in 2022. The country’s current account deficit was $164 million in August 2023. During the first three months of the current fiscal year FY24 (from July 2023 to September 2023), the country’s current account deficit declined to $947 million as compared to $2.258 billion in the same period last year.
Moreover, the country’s foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $67 million on a weekly basis, clocking in at $7.7 billion as of October 13, data released on Thursday showed.
