[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]KARACHI: Around noon on Friday, the Pakistani rupee had a significant comeback versus the US dollar, rising 4.5%, or more than Rs12, to Rs273.
After yesterday’s record collapse of 6.7%, or Rs19, to an all-time low of Rs285 per US dollar, the rupee made some progress versus the dollar.
The most recent improvement comes after three changes in the last 24 hours.
First, the government anticipates concluding the long-delayed staff-level agreement with the International Monetary Fund (IMF) next week, according to Finance Minister Ishaq Dar. The programme is essential for preserving the economy and preventing impending default.
Secondly, the rupee gained value after the central bank jacked up its key policy rate by 300 basis points to a 26-year high of 20% on Thursday.
The hike in the policy rate indirectly supports the rupee against the greenback, as it makes banking credit expensive, raises the cost of doing business and discourages imports.
Thirdly, the State Bank of Pakistan (SBP) said in a formal statement on Thursday that foreign exchange reserves had increased for a third consecutive week.
Increased foreign exchange reserves immediately protect the domestic currency from foreign dollars.
Following China’s $700 million loan, the nation’s reserves increased to a nearly six-week high of $3.8 billion, the SBP stated on Thursday.
Prior to this, IMF worries that the government was still in control of the rupee and the illicit market was regrouping caused the domestic currency to plummet to a record low of Rs285 per dollar.
Alpha Beta Core CEO Khurram Schehzad noted in a quick response that “this volatility produces more anxiety and worry in the minds of lenders, investors, importers and exporters, than anything else”.[/vc_column_text][/vc_column][/vc_row]
