Pakistani Rupee Strengthens by Rs15 against US Dollar in Interbank Market

In the first trading day after the nation received emergency finance from the International Monetary Fund (IMF), the Pakistani rupee appreciated by 15 rupees (Rs) against the US dollar on Tuesday in the interbank market.

Pakistan Rupee has increased by Rs15, according to the Forex Association of Pakistan, and was trading at Rs271 about 10am.

The stand-by agreement between Alpha Beta Core and the IMF was approved, according to Alpha Beta Core CEO Khurram Schehzad, and this was the primary cause of the dollar’s slide on the local market.

Komal Mansoor, Head of Strategy at Tresmark, said that the market might consolidate in the 272-276 level today. The central bank will play a key role in directing future currency levels, she added.

Saad bin Naseer, director of Mettis Global, predicted that once foreign exchange reserves begin to increase, people who were storing dollars will panic.

The hundi-hawala won’t take a risk, he added, therefore you will see an increase in remittances through banking channels.

The IMF agreement, according to currency dealer Zafar Paracha, had a favourable impact on the economy because investor trust had been restored. In the days to come, he believed, international investment will also rise.

According to him, the government should concentrate on getting the dollar rate down to a low level and letting it stay there. He claimed that Pakistan’s financial standing was “good” and that management was the sole weakness of the nation. He also suggested that the government reconsider its policies.

Owing to a lack of cash owing to bank holidays, various money changers had the option to purchase the dollar on Monday at their own accessible rates, which ranged from Rs275 to Rs285.

The currency appreciated during the first day of open trade following Pakistan’s Standby Agreement (SBA) with the IMF for $3 billion, creating a sense of economic security. Due to bank holidays, there were just a handful, and even those stocks of cash rupees were scarce. Despite the haste to sell, the majority of the businesses were unable to purchase dollars.

According to exchange businesses, there were just sellers and no buyers for dollars. In fact, the State Bank of Pakistan’s decision to allow banks to buy dollars from the banking market rather than exchange companies has caused the open market to lose the majority of its business with banks.

Published by BeGreen, 4th July 2023.