Pakistani rupee stayed firm against the US dollar on Thursday and gained 6 paisas (+o.03 percent) in the interbank market. According to the State Bank of Pakistan, the dollar opened at Rs175.04 and closed at Rs174.98. During the session, the local unit traded within a range of Rs1.15 per dollar showing an intraday high bid of Rs175.05 and an intraday low offer of Rs173.90. Within the open market, the rupee was traded at 175.5/177 per dollar.
Overall, the local currency gained 26 paisas against the greenback during the last four days. The rupee’s depreciation during the ongoing fiscal year 2021-22 has been Rs17.56 and Rs14.81 in the current year 2021.
According to currency experts, the government’s announcement of reaching a deal with the International Monetary Fund (IMF) helped stabilise rupee this week; however, the recovery rally quickly fizzled out as sentiments turned nervous when participants realised that IMF conditions are very demanding.
They, however, said that completion of the sixth review may help stabilise the exchange rate for a long period, adding it would arrest the rupee’s slide and steer recovery of local currency against the greenback.
They said that large imports are still a threat to the rupee’s stability. The import bill also resulted in ballooning of the current account deficit. Pakistan’s current account deficit sharply widened to $5.08 billion during the first four months (July-October) of the current fiscal year as compared to a surplus of $1.31 billion in the same period of the last year.
The experts said the Saudi government pledged $3 billion as cash transfer to Pakistan for assisting in the balance of payment; however, such amount has not been transferred to the SBP yet, which is sending negative signals to the market.
Kamran Nazir Malik is a law graduate and master in Economics. He is associated with TLTP News Wire Service as correspondent since 2018.