Rupee extends further gains

Local currency had gained Rs2.5 in interbank trade on Wednesday after $4.2bn Saudi support package

The Pakistani rupee continued to rebound for a second straight day as it appreciated around 0.30 per cent to close at Rs172.26 on Thursday, according to data released by the State Bank of Pakistan (SBP).

The rupee had shown a sharp recovery against the US dollar in the interbank market a day earlier on Wednesday as the currency closed the trade at Rs172.78, after Saudi Arabia announced a support package of $4.2 billion for Pakistan.

Saudi Arabia had announced that it was depositing $3 billion in the State Bank of Pakistan (SBP) to help support its foreign reserves.

Financial experts have opined that the development will ease the uncertainty due to the energy crisis and costly imports of oil which has been the major reason behind currency depreciation.

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“Rupee appreciation is [the] result of the Saudi funding announcement, widely seen as a positive surprise much needed to bolster the external account,” BMA Capital Executive Director Saad Hashemy told Reuters.

Asad Rizvi, former treasury head at the Chase Manhattan Bank, said: “Saudi Arabia agreed to provide $1.2bn oil on deferred payment and cash deposit of $3bn, while the REER index fell for the fourth consecutive month to hit 95.9 which supports a stronger PKR. And with IMF money in the pipeline, the rupee should take a breather.”

On Tuesday, the dollar was being traded at a record Rs175.27 in the inter-bank market. The rupee had maintained the downtrend for the past five months. I

 

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