ISLAMABAD: Pakistan’s rupee continued to gain in value against the US dollar on Wednesday, appreciating by 0.76 percent with analysts crediting it mainly to hopes that the country will secure relaxations from the International Monetary Fund (IMF) and declining prices of commodities worldwide.
Pakistan’s rupee has been on an upward trajectory against the greenback ever since a change in the finance ministry, with former finance minister Miftah Ismail resigning and ruling party senator Ishaq Dar taking his place.
The greenback closed at Rs223.94 on Wednesday, October 5 with the Pakistani rupee gaining by 0.76 percent, as per figures by the State Bank of Pakistan (SBP).
“[The rupee gaining value] is due to relaxations that the market expects Pakistan will get from the Asian Development Bank, International Monetary Fund (IMF) and the World Bank due to floods,” Samiullah Tariq, director research at Pakistan Kuwait Investment Company, told Arab News.
Tariq said prices of international commodities had also decreased in the global market, which had also eased pressure on the rupee. “In my opinion, the [greenback] will come down to the Rs210-215 level in the coming days,” he added.
He said a “change in sentiment” had also been observed in the currency market since Dar has taken over the finance ministry.
Earlier this week, Dar said the country’s currency will strengthen to under 200 rupees to the US dollar. He said the rupee would be strengthened through government “policies” as the current rate was inflated due to speculation.
Dar, who was sworn in last week as finance minister for his fourth stint in the role, has strongly favored intervention in currency markets in the past.
Khurram Schehzad, CEO of an investment banking and advisory outlet Alpha Beta Core, told Arab News the rupee had gained in value due to “better surveillance” of currency markets by the SBP and the finance ministry.
However, he warned the rupee may decline in the coming days.
“Our economy is weak and with the floods, it’s a challenging situation,” Schehzad said. “There are chances of imports rising due to which the rupee may decline again.”
He said Pakistan’s reserves were low and with the rupee appreciating, Pakistan’s exports may not be sustainable in the long run. Schehzad said the value of the US dollar against other currencies was also on the rise, which could mean the rupee may further weaken in the coming days.