Rupee Recovers Against US Dollar After Govt and SBP Offer ‘Assurances’

The Pakistani Rupee (PKR) continued its recovery against the US Dollar (USD) and posted more gains during intraday trade today.

It appreciated by 0.22 percent against the USD and closed at Rs. 238.84 after gaining 53 paisas in the interbank market today. The local unit quoted an intra-day low of Rs. 240.375 against the USD during today’s open market session. Since the regime change, the greenback is still up by Rs. 50.97 against the PKR.

The rupee closed in the green for the second consecutive day after the Ministry of Finance and the State Bank of Pakistan (SBP) released a joint statement to outline the nation’s progress in the fiscal year 2022-23. Also, both institutions assured that all actions for the International Monetary Fund’s (IMF) review were completed and the Executive Board’s meeting for the release of the $1.2 billion loan is expected in August.

At the same time, macroeconomic policies — both fiscal policy and monetary policy — have been appropriately tightened to reduce demand-led pressures, and rein in the current account deficit. Finally, the government has clearly announced that it intends to serve out the rest of its term until October 2023 and is ready to implement all the conditions agreed with the IMF over the remaining 12 months of the IMF program.

The statement also clarified rumors that a particular level of the exchange rate has been agreed upon with the IMF are completely unfounded. The exchange rate is flexible and market-determined and will remain so but disorderly movements are being countered, the statement concluded.

Globally, oil prices slid on Monday as weak manufacturing reports from China and Japan clamped hard on the demand outlook while investors braced for this week’s meetings between OPEC nations and other top crude producers on supply adjustments.

Brent crude was down by 1.19 percent at $102.7 per barrel, while the US West Texas Intermediate (WTI) also fell and went down by 1.63 percent to settle at $97.01 per barrel.

The PKR reported gains against most of the other major currencies in the interbank market today. It gained 13 paisas against the Saudi Riyal (SAR), 14 paisas against UAE Dirham (AED), 17 paisas against the Pound Sterling (GBP), 24 paisas against the Australian Dollar (AUD), and 25 paisas against the Canadian Dollar (CAD).

Conversely, it lost 13 paisas against the Euro (EUR) in today’s interbank currency market.