On Thursday, the Pakistani Rupee gained strength against the US dollar in the interbank market.
Rupee closed at Rs175.39 in the interbank compared with Wednesday’s Rs175.67, as per the State Bank of Pakistan (SBP).
It is pertinent to state that on December 29, 2021, the Rupee hit its all-time low of Rs178.24 against the US dollar.
It was because the greenback stood higher compared to its supply, the expanding current account deficit, surging imports, spiked global commodity prices and uncertainty about the IMF loan programme’s resumption.
The Rupee has maintained a downward trend for a long time now.
However, Thursday’s recovery was linked with an intervention by the State Bank of Pakistan, whose additional steps helped the Rupee to trim its losses against the foreign currency.
The Pakistani currency closed at Rs175.39, recording a gain of 0.16%.
Currency dealers believe the Rupee might show some signs of stability as the State Bank has decided to intervene in the market to ease the pressure.
With the increase of 0.16%, the Rupee has depreciated by 11.33% – Rs17.85 – since the start of the fiscal year on July 1, 2021, stats released by the central bank said.
For the past nine months, the Pakistani currency has lost 15.18% – Rs23.12 – compared to the record peak of Rs152.27 recorded in May 2021.
The central bank conducted an Open Market Operation and Reverse Repo Purchase (Injection) on Thursday – February 17.
According to experts, it is not the first time that the SBP has pumped money into the market to artificially defend the Rupee.
Some dealers said the demand for dollars from importers was not high, whereas others said that the increase in dollar inflows from remittances helped the rupee gain value. Dealers expect some fluctuations depending on debt and import payments.