Pakistani currency, while dismissing the negative sentiment, quickly recovered to slightly below Rs279 against the US dollar in inter-bank market on Thursday as the “authorities concerned did not find any unusual demand for the greenback.”

According to State Bank of Pakistan’s (SBP) data, the currency regained 0.53%, or Rs1.48, and closed at Rs278.81 to a dollar.

A day ago, the rupee dropped 1.16%, or Rs3.26, to the one-week low at Rs280.29/$ on reports of a surge in demand for dollars from importers and for making coupon payments to the global investors who had invested in Pakistan’s Eurobonds and Sukuk in the international market.

Exchange Companies Association of Pakistan (ECAP) General Secretary Zafar Paracha blamed banks for the sharp drop, saying they once again tried to manipulate the rupee-dollar parity through speculation that additional demand for dollars had come into the market from importers and from the government for interest payments.

Read Rupee recovers for sixth day in a row

“The authorities concerned, who conducted the crackdown on foreign currency smugglers and hoarders, checked and found no additional and unusual demand for the greenback in the market…later today (Thursday), the rupee partially recovered the losses,” said Paracha.

He said the rupee was expected to maintain its uptrend, which was snapped around Rs277 on Tuesday. “The rupee is poised to appreciate to Rs260/$ in the ongoing recovery spell.”

Earlier, the rupee cumulatively regained 11%, or over Rs30, to the three-month high at Rs276.83/$ over four weeks in the wake of the crackdown.

In open market, the currency on Thursday regained Rs1 to Rs280/$, according to ECAP.

Paracha said supplies of the foreign currency continued to rise as open market dealers sold a record $500 million in a month in inter-bank market for the first time after seven to eight months.

Workers’ remittances and export earnings have improved, which are increasing the supply of foreign currencies in Pakistan’s market.

Published in The Express Tribune, October 20th, 2023.

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