The rupee continued to recover in the interbank market on Thursday, extending its gains against the dollar for the fifth straight session.
According to the Forex Association of Pakistan (FAP), the local currency had gained Rs3.9 against the dollar at 10 a.m. to reach Rs224.9.
A day earlier, the local currency jumped Rs 9.59 or 4.2 percent in the interbank market – the largest one-day gain in years – to close at Rs 228.80.
Fahad Rauf, head of research at Ismail Iqbal Securities, said: Reuters that according to central bank data, it was the highest rally of the rupee in both absolute and percentage terms since 1999.
After two weeks of beating against the dollar, the rupee fell to its lowest level against the dollar on July 28, closing at 239.94. After that, it started to bounce back from Friday and rose by Rs11.5 until Wednesday.
Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (Ecap), said one of the reasons for the rupee’s recovery was the lower import bill for July, which was expected to fall further in August.
“We don’t need to import oil” [in August] as we have stocks for about two months. The prices of edible oil, pulses, gas and coal have fallen internationally. For example, the import bill has been reduced and the pressure on the rupee has decreased.”
Data released Tuesday by the Pakistan Bureau of Statistics (PBS) shows the July import bill fell 12.81 percent to $4.86 billion, from $5.57 billion in the same month last year. . On a monthly basis, the import invoice fell by 38.31 pc.
Paracha also appreciated the role of the State Bank of Pakistan (SBP) in this regard. The central bank had been active for the past two to three days and had issued a joint statement with the Treasury Department on Sunday saying that there was no risk of default and that the country’s financing needs would be more than fully met in the current fiscal year. are covered. , he noticed.
“This has also helped. The government has also played a positive role.”
However, Ecap’s secretary general said the rupee was still undervalued and should recover to Rs190 in the short term and to Rs160 in the long term. “Nowhere in the region is the dollar more expensive than in Pakistan,” he said.
More to follow.