Since last week of September, the Pakistanin rupee keeps up its upward momentum against the US dollar as the greenback shed its value by 18 paisas in the interbank trading on Tuesday, reported 24NewsHD TV channel.

As per the information by the forex dealers, the value of rupee was appreciated during the morning trading activity and dollar was traded for Rs216.80 down by Rs1.17 by 10:20am. But later towards the close in the evening, the dollar was settled at Rs217.79 down by 18 paisas. 

https://twitter.com/StateBank_Pak/status/1579792101696380929?cxt=HHwWgoClifyixuwrAAAA

Yesterday, the US currency was closed at Rs217.97. 

https://twitter.com/StateBank_Pak/status/1579433546519031808

During the last 12 trading sessions, the value of dollar has been depreciated by Rs22.85. 

The rupee is showing resilience since Finance Minister Ishaq Dar took the charge of Finance Ministry and warned speculators of strict action for artificially appreciating the rate of dollar. He said that the actual rate of US currency should have been below Rs200. 

The State Bank of Pakistan has started a crackdown on traders and commercial banks who were involved in the speculative trading which has enabled the local unit to resuscitate. 

Besides this, the SBP has been providing liquidity to the market which is likely to help banks in releasing payments to clear import backlog. 

Other factors which contributed to the reviving of rupee include declining gap between interbank and KERB; increased remittances; and possible arriving of additional international commitments that comprise $1.5 billion from the ADB by the end of October, UN commitment of near $1 billion, $0.5 billion from Asian Infrastructure Investment Bank and $1 billion from the World Bank during a period between Oct and Dec. 

The market was also upbeat about the resilience of rupee as the State Bank on Monday left its policy rate unchanged at 15 per cent for the next two months. 

The Monetary Policy Committee of the SBP noted the continued deceleration in economic activity as well as the decline in headline inflation and the current account deficit since the last meeting.

The economy has slowed considerably since the last MPC meeting. Most demand indicators were lower in both July and August than in the same period last year—including sales of cement, POL, and automobiles, said the SBP.

The current account deficit shrank for the second consecutive month in August to only $0.7 billion, almost half the level in July. In September, the data shows that the trade deficit contracted sharply by 19.7pc month-on-month and 30.6pc year-on-year to reach $2.9bn, reflecting a decline in both energy and non-energy imports amid stable exports.

The lowering current account deficit augurs well for the rupee stability.

 

Reporter Ashraf Khan