The rupee/dollar parity remained volatile during the start of the week. The rupee endured a highly volatile trading session with quotes being recorded in the range of Rs. 2.67.
At the end of the day, the rupee appreciated by 26 paisa against the US dollar from the last session’s closing of Rs. 160.18 per USD. The rupee went on to touch an intraday high of Rs. 157.50 during the day.
Yaqoob Abubakar from Tresmark, an application that tracks financial markets said that our exchange rate is indeed becoming market-determined as witnessed by the see-saw movement.
A major foreign inflow drove the rupee to a high of 157.5 but closed at its initial levels of 159.91 as the inflow got absorbed in the market. A 3% movement both ways is substantial for our currency.
Higher foreign exchange reserves and improvement in the current account balance are expected to keep the rupee stable at the current levels.
The foreign exchange reserves of the country have risen by $1.18 billion due to financial assistance received from the International Monetary Fund. According to statistics issued by the State Bank of Pakistan, the liquid foreign reserves of the country surged to $18.463 billion as of April 24.
The country received $1.39 billion from the IMF under the Rapid Financing Instrument (RFI) to address the economic impact of COVID-19.
The central bank has also made government external debt repayments amounting to $234 million. Overall, SBP’s reserves increased by $1.181 billion to stand at $12.07 billion.