The Pakistani rupee (PKR) surged higher and posted gains against the dollar during interbank trade on Friday, rising as high as 261 against the greenback.
At close, the rupee appreciated by 0.59 percent and suspended movement at 262.82 after gaining Rs. 156 against the greenback.
The local unit was bullish against the dollar and opened trade at 264 in the open market. By midday, the greenback went lower against the rupee to around 262. After 1 PM, the local unit was largely green against the top foreign currency before the interbank close.
Today’s gains come amid expectations that the coalition government’s Finance (supplementary) Bill 2023 would be approved and tabled for implementation by the upper house for National Assembly’s upcoming session next week. Markets snubbed political and economic pressures and put weight behind the local unit with expectations that a staff-level agreement with the International Monetary Fund (IMF) could be signed any day as the government goes beyond its means to implement Rs. 170 billion tax laws as security.
The rupee is still down over Rs. 28 since its record-breaking single-day drop of Rs. 25 in the last week of January after the currency was finally ‘freed’ against the US dollar in the inter-bank market. As per market trends and fiscal developments observed today, the PKR has managed to gain over Rs. 1 for the 4th time this week.
Money changers see short-term discipline but say the remainder of February-June is imperative to understand PKR trends for the next financial year. Reserves need revamping and it is in the country’s best interests to halt development spending and save the treasury instead of spending it all.
On February 10, the foreign currency reserves held by the SBP were recorded at $3.192 billion, up $276 million compared to $2.916 billion on February 3. However, despite the increase, the central bank reserves remain at their lowest since February 2014.
Overall liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $8.702 billion, up $163 million over the previous week. The net reserves held by banks stood at $5.509 billion, registering a decrease of $114 million during the week.
The PKR was bullish against all of the other major currencies in the interbank market today. It gained 42 paisas against the Saudi Riyal (SAR), 42 paisas against the UAE Dirham (AED), Rs. 3.2 against the Canadian Dollar (CAD), and Rs. 3.4 against the Euro (EUR).
Moreover, it gained Rs. 3.59 against the Australian Dollar (AUD) and Rs. 5.31 against the Pound Sterling (GBP) in today’s interbank currency market.