Rupee Reaches One-Month High Against USD

Friday was the third day in a row that the Pakistani currency kept going up, and it recovered to around Rs260 to a dollar on the inter-bank market.

According to the State Bank of Pakistan, the value of the rupee against the dollar went up by 0.36%, or Rs0.94, to a one-month high of Rs259.99 (SBP).

The most recent gains happened after the central bank said that the country’s foreign exchange reserves had gotten better for the second week in a row. Last week, they went up $66 million, reaching a four-week high of $3.26 billion.

The rupee was also helped by the news that China would lend Pakistan $700 million this week. After the inter-bank market closed for the day, Pakistan’s Finance Minister Ishaq Dar said that $700 million had been sent to the country.

Samiullah Tariq, the head of research at the Pak-Kuwait Investment Company, said that the rupee might settle between Rs255 and Rs260 per dollar in the short term.

Later, the rupee will move in the same direction as the loan tranche from the International Monetary Fund (IMF) and the money from other multilateral and bilateral creditors.

He said that non-debt foreign currency inflows had grown more than non-debt foreign currency outflows in recent years. This is because exporters had been holding on to their earnings overseas while waiting for the rupee-dollar exchange rate to improve.

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