Dollar weak

Rupee smacked dollar on the ground; PKR acheive massive gain of Rs 12 against dollar in interbank trade

Interbank rates for the US dollar against the Pakistani rupee are Rs226.

Infosette (News) KARACHI: As the nation’s imports decreased in July, the Pakistani rupee continued to strengthen in intraday trade on Wednesday, gaining Rs11.38 against the US dollar.

The dollar decreased by Rs12.38 during Wednesday’s intraday trade, trading at Rs226 to the rupee, down from 238.38 at Tuesday’s interbank close.

The rupee, one of the worst performing currencies in the world, began losing ground on Friday after falling for 10 straight sessions in the final days of July and appreciating by about 5% just last week.

Following a decline in imports, the local currency made gains.

Forex dealers claim that despite market volatility there are no buyers for dollars.

According to data from the Pakistan Bureau of Statistics (PBS), imports have decreased by 38.3 percent over the past month as a result of the government’s decision to ban a number of luxury goods in order to address the country’s cash shortage.

The decline in imports was accompanied by a decline in exports as well. The trade deficit decreased by 18.3% to $2.64 billion in July 2022 from $3.235 billion in July 2021, easing pressure on the rupee. The gap was $4.96 billion in June 2022.

Tahir Abbas, the head of research at Arif Habib Limited, told that the currency is stabilising and expected to appreciate further as import pressure has decreased and demand has decreased.

The external account data is positive:

External account data, according to capital market expert Muhammad Saad Ali, are encouraging and will help the economy grow even more.

The International Monetary Fund (IMF) announced that Pakistan has fulfilled the final prerequisite, namely raising the petroleum product tax, for the combined seventh and eighth reviews, which led to further strengthening of the rupee.

A board meeting is tentatively scheduled for late August once sufficient financing assurances are confirmed, according to a statement released on Tuesday by Esther Perez Ruiz, the IMF’s Resident Representative for Pakistan.

Abbas noted that additional influxes from friendly nations, along with the IMF tranche disbursement anticipated by the end of this month, will also contribute to the stabilisation of the economy in light of the lender’s statement.

As Pakistan prepares to make a $1 billion bond payment in December, the rupee has lost more than 30% of its value against the dollar this year and the nation’s dollar debt has fallen to record lows.

Restart of the IMF programme:

According to Ali, news flow that Pakistan is nearing the resumption of IMF programme  such as IMF acknowledgment that Pakistan has fulfilled all prior conditions have increased optimism for greater macroeconomic stability in the future.

Speaking of the current political climate, he claimed that it appears that neither the PTI nor the government are advocating for early elections, which could delay the steps required to ensure macroeconomic stability.

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