PKR rises for 3rd week to five-month high vs USD

KARACHI
Pakistani rupee edged up against the US dollar in the interbank market for the third week in a row, appreciating by 0.1 percent to a new over five-month high, fuelled by relatively better supply of the greenback in the domestic economy.
According to details, the rupee opened at 279.04 against the greenback in the interbank market on Monday last and closed at 278.74 on Friday. Overall, the rupee has improved by Rs9.55 during the current fiscal year 2023-24.
The local unit improved by Rs0.39 in February, Rs2.36 in January and Rs3.31 in December, while it shed Rs3.69 against the US dollar in November after gaining Rs6.26 (+2.23 percent) against the greenback in the month of October.
The local currency has cumulatively strengthened by 10.17% or Rs28.36 over the past six months compared to its all-time low of Rs307.10/$ in the first week of September 2023.
Similarly, the local unit gained traction against the greenback in the open market and closed the week in the range of 278.61 for buying and 281.26 for selling against 279 for buying and 282 for selling in the preceding week, according to data provided by different exchange companies.
The rupee surged against the greenback by Re1 in February, Rs2 in January and Rs3.50 in December.
Meanwhile, the International Monetary Fund (IMF) and Pakistan kick-started talks on Thursday during the second and last review of Pakistan’s ongoing bailout programme.
If the talks end successfully, then Pakistan will receive a final tranche of approximately $1.1 billion. The government hopes for a successful IMF staff-level agreement after the review.
The finance ministry said in a statement that the IMF and Islamabad discussed Pakistan’s overall macro-economic indicators, efforts on fiscal consolidation, structural reforms, energy sector viability and state-owned entity governance.
Finance Minister Muhammad Aurangzeb has expressed the government’s commitment towards working with the IMF on the reforms agenda for economic growth and stability.
Meanwhile, the State Bank of Pakistan (SBP) will likely keep its benchmark interest rate at a record 22 percent for the sixth consecutive policy meeting on Monday amid persistent threat of inflation. Most analysts anticipate a rate cut starting in the second quarter of this year; however, some of them see room for a rate cut at next week’s review meeting.
In a related development, the country’s foreign currency reserves increased 0.22 percent week-on-week to $7.91 billion, according to the weekly update released by the SBP. The central bank’s foreign currency reserves reached $7,912.9 million in the week ended on March 8, 2024, up $17.2 million compared to the previous week’s tally of $7,895.7 million. Of the total, the foreign currency reserves held by commercial banks rose to $5,238.4 million compared to $5,124.3 million a week ago. Accordingly, the country’s total liquid reserves came in at $13,151.3 million in the week under review, up from $13,020 million in the prior week.