Rupee Records Its Biggest Daily Increase Against US Dollar in 18 Months

The Pakistani Rupee finally appreciated against the US Dollar today after it sank to a record low yesterday. The local unit gained Rs. 2.49 against the dollar and was closed at 172.78 in the interbank market today.

According to Arif Habib Limited, this is Pakistani Rupee’s (PKR) biggest daily appreciation against the USD since April 2020.

The local currency lost 84 paisas against the US Dollar (USD) to hit an all-time low at 175.27 on Tuesday.

 

The gains came after Saudi Arabia announced a support package of $3 billion as deposits in the State Bank of Pakistan. It will also provide $1.2 billion worth of financing on deferred payments for refined petroleum products.

The former Treasury Head of Chase Manhattan Bank, Asad Rizvi, remarked that Saudi Arabia’s announcement and the prospect of additional aid from the International Monetary Fund have helped to calm the turmoil in the market.

The central bank reported that Pakistan’s real effective exchange rate index had fallen to 95.9 in September.

The SBP said that the REER has depreciated by 4 percent since the start of the fiscal year (FY) 2021-2022 and by about 7 percent since its recent peak of 103 in April.

The REER is the weighted average of a country’s currency compared with an index or basket of other major currencies. A decrease in the REER means that a country’s exports are now cheaper and more competitive, while its imports are more expensive.

Alpha Beta Core CEO, Khurram Shehzad noted that Saudi Arabia’s announcement is likely to help the PKR appreciate against the dollar to a value below 170.

 

Meanwhile, the Pakistan Stock Exchange suspended trading for more than two hours to resolve the technical glitches caused by its newly launched trading terminal.

 



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