PKR improves to 176.07 against USD with 31 paisas gain


Pakistani rupee gained 31 paisas (+0.18 percent) against the US dollar on Friday, ending the week on a positive note.
The State Bank of Pakistan said in a statement that the dollar opened at Rs176.38 in the interbank market and closed at Rs176.07.
The rupee witnessed a dull trading range during the session, showing the intraday high bid of 176.30 and low offer of 176.05. Within the open market, the rupee was traded at 177.50/178.50 per dollar.
Overall Pakistan rupee has gained 60 paisas against the US dollar during this week, while it has depreciated by 12 paisas during the current year 2022. The local unit has depreciated by Rs18.64 during the ongoing fiscal year 2021-22.
The local currency remained on the front foot against the American dollar as the latter entered a sell-off spiral on Wednesday in the global markets following the release of US inflationary figures for December. Inflation rose by 7 percent, the fastest annual rate since 1982, a sign that inflationary pressures are far from receding amid surging consumer demand and overburdened supply chains.
However, on a month-on-month basis, prices rose from the prior month by 0.5 percent in December, easing from a 0.8 percent gain in November.
According to currency experts, the approval of the Finance (Supplementary) Bill, 2021 by the parliament and the State Bank of Pakistan (Amendment) Bill 2021 by the National Assembly strengthened the local unit as the steps will pave the way for the revival of the International Monetary Fund (IMF) programme.
They said that these bills brought the IMF-related uncertainty in the market to an end. They said the greenback is overvalued against the local currency. However, they warned that rising commodity prices in the international market threaten the rupee’s stability, as Pakistan’s import bill may increase and that will put pressure on the rupee.
Meanwhile, workers’ remittances rose to $15.8 billion during the first six months (July-December) of the current fiscal year 2021-22, showing a growth of 11.3 percent as compared to the same period of the last financial year.
During the month of December 2021, workers’ remittances continued their strong impetus of remaining above $2 billion since June 2020 as they jumped to $2.52 billion, showing a growth of 2.5 percent on a month-on-month basis and 3.4 percent on a year-on-year basis. This also supported the PKR to make gains against the USD.
Moreover, the rupee’s stabilisation is the result of the apt measures taken by the central bank in recent days to improve the transparency in the foreign exchange market.