Daily Times

Rupee continued making slight gains against the US dollar for the fifth week in a row and improved by 61 paisas in the interbank market and 50 paisas in the open market.

According to details, the rupee opened at 283.87 against the greenback in the interbank market on Monday last and closed at 283.26 on Friday, registering a rise of 0.21 percent week-on-week. The rupee improved by Rs1.10, 40 paisas, Rs1.13 and 53 paisas in the preceding four weeks. Overall, the local unit has improved by Rs3.77 during the previous five weeks.

Similarly, the rupee improved by Rs5.03 during the current fiscal year 2023-24. However, the rupee depreciated by Rs52.42 in the current year. The rupee 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 currency surged more than 6 percent in September to become the top performer in the world. Similarly, the local unit gained 50 paisas against the greenback in the open market and closed the week in the range of 281.50-284.50 after opening the week at 282-285 on Monday. The rupee remained almost stable against the greenback in the preceding week too.

The International Monetary Fund’s (IMF) executive board will meet on January 11 to consider the final approval to disburse the next $700 million tranche from its current loan programme with Pakistan. Pakistan has been facing an acute balance of payment crisis, along with historically high inflation and an unprecedented currency devaluation in the past couple of years.

In a related development, the country’s foreign exchange reserves rose by $100 million last week. The State Bank of Pakistan (SBP) said on Thursday that total liquid foreign exchange reserves held by the country stood at $ 12.206 billion as of December 8, 2023 compared to $ 12.107 billion on December 1, 2023. During the week under review, SBP’s reserves increased by $21 million to $ 7.041 billion and net foreign exchange reserves held by commercial banks surged by $79 million to $5.166 billion at the end of last week.

The central bank kept its key rate unchanged at a record 22 percent on Tuesday as it waits for the effects of previous hikes to filter through the economy and further tame retail inflation. The bank’s monetary policy committee said that an increase in gas prices last month could affect the inflation outlook.

The rate was raised to 22 percent in an off-cycle meeting in June as a last-gasp attempt to secure a $3 billion bailout from the IMF as part of a reforms programme aimed at bringing stability to the troubled $350 billion economy. The SBP and the IMF both say that they expect inflation to ease in the current financial year ending in June 2024, but inflation remained at 29.2 percent in November after energy prices were hiked to meet reform targets.