The Pakistani rupee (PKR) rose further against the dollar during interbank trade on Friday, going as high as 259.725 against the greenback.
At close, the rupee appreciated by 0.36 percent and suspended movement at 259.99 after gaining 94 paisas against the greenback.
The local unit was all green against the dollar and opened trade at 262.50 in the open market. By midday, the greenback went lower against the rupee to around 259.825. After 1 PM, the local unit was largely stable against the top foreign currency before the interbank close.
The rupee gained further against the dollar today after the country’s forex reserves registered their second consecutive weekly increase on Thursday. On February 17, the foreign currency reserves held by the State Bank of Pakistan (SBP) were recorded at $3.259 billion, up $66 million (or 2.1 percent) compared to 3.193 billion on February 10.
Last week, the central bank reserves went up by $276 million or almost 10 percent after falling to a precariously low level of below $3 billion in the preceding week.
SBP’s latest open market operations saw banking channels get a fresh inflow of Rs. 1,800 billion on Friday, prompting analysts to put more weight behind a monetary policy rate hike in the Bank’s upcoming session in March.
The rupee is still down over Rs. 24 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 gained almost Rs. 1 for the second consecutive day today.
Money changers say markets are anticipating external financing inflows once a deal with the International Monetary Fund (IMF) is finalized, which may be agreed upon by the end of this month. If the IMF agreement is completed and approved by the Executive Board, it will release a little over $1 billion in funding, which will also unlock other bilateral and multilateral inflows from partners in China, Saudi Arabia, and Qatar.
The PKR was bullish against all of the other major currencies in the interbank market today. It gained 25 paisas against the Saudi Riyal (SAR), 25 paisas against the UAE Dirham (AED), Rs. 1.42 against the Canadian Dollar (CAD), Rs. 1.74 against the Euro (EUR), and Rs. 1.95 against the Australian Dollar (AUD).
Moreover, it gained Rs. 2.14 against the Pound Sterling (GBP) in today’s interbank currency market.