Karachi: Rupee started showing signs of recovery as it gained nearly Rs 2 against dollar to close at Rs 267.89 after developments surrounding talks with International Monetary Fund (IMF) unfolded.

Domestic unit which had closed at an all-time low of 269.63 on Monday gained Rs 1.74, or 0.65 percent and closed at 267.89 against greenback in interbank market.

Since cap on currency was lifted on January 25, rupee has been falling in order to shift to market-driven exchange rate. Unit lost Rs 37 or 13.81 percent, overall since January 25 compared to Wednesday’s close of Rs 230.89 to dollar, according to State Bank of Pakistan data.

Arif Habib Limited Head of Research Tahir Abbas said that currency gained lost ground as inflows from export proceeds and remittances began to improve. Analyst said that availability of dollar in open market also played significant role in currency’s recovery.

Abbas predicted that currency will consolidate within range of 260-270 against greenback in upcoming days. Pakistan is scrambling to secure foreign financing to avoid default.

Earlier today, Fitch Solutions predicted that Pakistan rupee is expected to weaken further, particularly with Pakistan’s balance of payments positions likely to remain weak for several more months.

In its analysis, Fitch warned that continued weakening in rupee will have broader economic implications too in near term, “It could exacerbate imported inflationary pressure and may eventually result in steeper policy rate hikes from SBP.”

Published in The Daily National Courier, February, 01 2023

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