Dollar Drops Below Rs. 222 in Intraday Trade After Dar’s Jumbo Rupee Forecast [Updated]

The Pakistani Rupee (PKR) continued its mysterious recovery against the US Dollar (USD) and posted massive gains of Rs. 2.13 during intraday trade today after Finance Minister Ishaq Dar’s claim that the dollar will fall below Rs. 200 by end-October.

It appreciated by 0.90 percent and closed at 221.94 after gaining Rs. 2.00 against the greenback. The local unit quoted an intraday low of 233.375 against the greenback.

The local unit was all green in the morning against the greenback and resumed trade at 222.75 in the open market. By 10:15 AM, the greenback went as low as 221.81 against the rupee. By midday, the greenback went as low as 223.1 against the rupee. After 2 PM, the local unit rose and stayed at the 221-222 level against the top foreign currency before the interbank close.

Speaking to a private television channel, the finance minister talked at length about the value of the dollar and said that the record-high price of the dollar in recent months was due to manipulation. He said if the PKR strengthens against the US dollar, the inflation rate will significantly come down.

Yesterday, the local unit gained Rs. 1.69, or 0.76 percent, and closed at Rs. 223.94 against the greenback.

Our channel checks turned over positive remarks from money changers earlier today, who are of the view that the PKR growth is being driven by last week’s “Dar-inspired sentiments”. Traders are selling dollars in the market over the likelihood of more increases in the value of the rupee in the near term.

Other brokers cited a number of factors for the rupee’s rise, including the Asian Development Bank’s (ADB) announcement of $2.3-2.5 billion in aid and expectations of a consistent decline in imports. Pakistan has begun to receive flood relief funds from around the world. The import bill is expected to be reduced, and if it does rise, dollar inflows will continue.

Other Currencies

The PKR gained further against the other major currencies in the interbank market today. It gained 54 paisas against the UAE Dirham (AED), 89 paisas against the Australian Dollar (AUD), Rs. 2.02 against the Canadian Dollar (CAD), Rs. 2.63 against the Euro (EUR), and Rs. 4.18 against the Pound Sterling (GBP).

Moreover, it gained 53 paisas against the Saudi Riyal (SAR) in today’s interbank currency market.