| The Pakistani rupee registered significant gains against the US dollar, appreciating 1.13% in the inter-bank market during trading on Monday.
At around 12pm, the rupee was being quoted at 273.50 during intra-day trading, an improvement of Rs3.08.
“It seems that the process of exchange rate correction has initiated, after exporters have encashed their payments in large numbers, leading to a selling pressure in the inter-bank market,” said Zafar Paracha, General Secretary, Exchange Companies Association of Pakistan, said in a statement.
“The upward momentum is expected to continue in the coming days,” he said.
The currency dealer expressed optimism that Pakistan will reach a staff-level agreement with the IMF (International Monetary Fund) by February 9.
“This will bring a positive wave, however we would also face a further spike in inflation, which the authorities need to manage,” he said, while urging stakeholders to design long-term policies for the country.
The rupee appreciate comes after the the currency slipped to another all-time low against the US dollar on Friday, closing at 276.58, a decline of Rs5.22 or 1.89%.
Overall last week, the rupee had recorded a cumulative fall of 5.05%.
Low levels of foreign exchange reserves, which fell another $592 million to a mere $3.09 billion, followed by remarks made by Prime Minister Shehbaz Sharif about the IMF giving Pakistan a tough time over unlocking a $1-billion loan had added to investor concerns.
Talks with the IMF continued amid reports that the Washington-based lender was insisting on reforms and prior conditions over several key areas including taxation, power sector, and energy prices.
Analysts believe the rupee is likely to stay under pressure until clarity is achieved on the IMF programme.
Globally, the dollar extended its rally on Monday after a strong US jobs report suggested the US Federal Reserve could stay hawkish for longer, while the yen was hit by news the Bank of Japan’s Deputy Governor Masayoshi Amamiya was being sounded out to be the next governor.
On Friday, the US Labor Department’s closely watched employment report showed that nonfarm payrolls surged by 517,000 jobs last month. Against a basket of currencies, the US currency touched a nearly 4-week high of 103.22 and was last at 103.18.
Oil prices inched up in early trade on Monday after falling around 8% last week to more than three-week lows as jitters over major economies outweighed signs of a demand recovery in China, the world’s top oil importer. |
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