Dollar on the rise again after rupee’s brief recovery

A man counts dollar bills. — AFP

The US dollar rose again Wednesday against the Pakistani rupee after a brief winning streak for the local currency in the preceding three trading sessions in the interbank market.

The dollar gained Rs0.97 against the rupee in the interbank market during intraday trade. At around 1pm, the dollar was changing hands at Rs220.70 in the interbank market.

At the last trading session, the Pakistani rupee had managed to maintain its upward trajectory against the US dollar for a third consecutive session in the interbank market, falling below the psychological barrier of Rs220.

The hopes of early disposal of the Asian Development Bank (ADB) loans to assist Pakistan in devastating floods had strengthened with the rupee closing at 219.73 on Tuesday as the market is anticipating inflows of $1.5 billion from the Manilla-based lender this week and $2 billion in the first week of November.

‘Little pressure’

Commenting on the rupee’s movement, Arif Habib Limited’s Head of Research Tahir Abbas said that the local unit is facing a “little pressure” in the interbank market.

He said that it seems like Pakistan has received funding from the Asian Development Bank (ADB) and the foreign exchange reserves stand in a better position.

“Most likely, allocation of $2 billion in funds from the World Bank will be received in November or December,” he said, adding that the International Monetary Fund’s (IMF) review scheduled in November will provide some relaxation and some targets will be eased up.

Prime Minister Shehbaz Sharif’s visit to China next month is expected to tap into new investment opportunities and there might be talks about rescheduling, he said.

“This is a daily basis depreciation, however, the currency will consolidate between 215 to 220,” he added.

‘Currency is market-determined’

Speaking to The News, Pakistan-Kuwait Head of Research Samiullah Tariq said that the currency is market-determined, so the supply derives the demand.

He added that there is a bit of pressure from the imports and the political uncertainty impacted the currency.

Tariq said that the market depended on the ADB’s funds and that it would reverse the impact. However, according to the recent government system, the number of dollar outflows will be the same as inflows.

He added that the effect of backlog from the 2-3 days can be seen on the parity. 

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *