LAHORE: The Pakistani rupee (PKR) has regained Rs1.42 in its value against the greenback, bouncing back from State Bank of Pakistan’s (SBP) mid rate on Friday of Rs150.90 to Rs149.53 in the interbank market, reverting down from the Rs150 barrier, here on Monday.
During the last week, the rupee had hit its record low against the US Dollar (USD) to reach Rs154 in the open market and Rs153.5 in the interbank market on Tuesday. Since Tuesday, this is the fourth consecutive session where the rupee has registered gains against the dollar, gaining an overall Rs3.95 against the dollar in an effort to nab the dollar hike and further devaluation.
According to data from Mettis Global, “today’s interbank session observed the Pakistani rupee slightly stronger at open as it was quoted at 150.75/151.25 per US Dollar compared to previous session’s closing quote of PKR 150.92 per USD.”
Currently, the rupee is being quoted at 149.50/150.25 per US dollar which marks an appreciation of Rs1.42 against its closing rate on Friday.
Analysts from Mettis Global told Profit, “The local currency strengthens on the back of higher inflow of remittance due to Ramadan and the approaching festival of Eid. Pakistanis stationed abroad remit comparatively larger sums during this season.”
It is being speculated that although the rupee is gaining against the dollar, however, it will start to depreciate again once the budget announcements come in along with foreign loan repayments.
Ibrahim Moosa for Mettis Global said, “I am expecting the dollar to appreciate to the Rs148 per dollar level keeping in mind the surge in remittances usually expected around the end of Ramadan and because of the Saudi Loan Facility regarding deferred oil payments easing the pressure on PKR/USD.”
He added, “Eventually, this will be short-lived, and I expect it to be back up above the Rs150-151 per dollar level because of increased demand of dollars for our international obligations.”
On the other hand Senior Market Analyst Hammad Malik told Profit, “The appreciation or revaluation of rupee is definitely not because of the market forces. It is being done through state intervention with the intent of instilling a sense of calmness amongst the public. The sad part is that the general public is not aware of the effects of depreciation and appreciation. Where the people in power were supporting and advocating depreciation, they are now measuring appreciation as a factor of success.”
He further went on to say, “The depreciation is inevitable, it will fall in value, sooner than later. The demand for dollar has to rise for repayments and we do not have enough reserves, hence the need to buy dollars.”
Pak Kuwait Investment Co AVP Research Adnan Sheikh, on the other hand, was of the view, “People are likely booking profits in dollars and likely investing in high yielding fixed income or equities.”
“I think this appreciation drive will continue on till eid,” he reiterated.
He added, “We may see the rupee gain to Rs148 in the coming weeks on the back of eid remittances and local speculators booking profits on hoarded dollars. But going forward large payments are due in June which will impact our current account deficit (CAD) and reserves position adversely.”