Pakistani Rupee Strengthens Further, Gaining 5 Paisas for the 5th Consecutive Session Against USD
Despite a dip of Rs3.69 against the US dollar in November, following a remarkable surge of Rs6.26 (+2.23 percent) in October, the rupee remains a top performer globally, having escalated by more than 6 percent in September.
Karobar
In a positive trend, the Pakistani Rupee (PKR) showed resilience, strengthening by 5 paisas (+0.02 percent) against the US Dollar for the fifth consecutive session in the inter-bank market on Monday. This improvement was confirmed by the State Bank of Pakistan (SBP) in a tweet, indicating that the rupee opened at 283.26 against the dollar and closed at 283.21.
Over the past week, the local currency demonstrated consistent growth, gaining 61 paisas against the greenback. Notably, in the previous five weeks, the rupee has seen an overall increase of Rs3.77. The current fiscal year, 2023-24, has witnessed a noteworthy improvement of Rs5.08 in the rupee's value. However, it's essential to note that over the course of the current year, the rupee experienced a depreciation of Rs52.37.
Meanwhile, in the open market, the local unit remained stable for the third consecutive day against the US dollar, quoted at 281.50 for buying and 284.50 for selling. This data, provided by the Exchange Companies Association of Pakistan (ECAP), shows the rupee gaining 50 paisas against the greenback in the previous week.
On an economic front, the International Monetary Fund’s (IMF) executive board is scheduled to convene on January 11 to consider final approval for the disbursement of the next $700 million tranche from its ongoing loan program with Pakistan. This development is crucial as Pakistan grapples with a balance of payment crisis, historical inflation levels, and unprecedented currency devaluation.
In a related update, the country's foreign exchange reserves experienced a positive boost, increasing by $100 million last week. The State Bank of Pakistan (SBP) reported that total liquid foreign exchange reserves reached $12.206 billion as of December 8, 2023, compared to $12.107 billion on December 1, 2023. During the same period, SBP's reserves rose by $21 million to $7.041 billion, and commercial banks' net foreign exchange reserves surged by $79 million to $5.166 billion.
In monetary policy matters, the central bank opted to maintain its key rate at a record 22 percent on Tuesday. This decision reflects a cautious approach, allowing the effects of previous rate hikes to permeate the economy and further control retail inflation. The monetary policy committee acknowledged the potential impact of last month's increase in gas prices on the inflation outlook.
