KARACHI: In view of loan tranche expectations from the International Monetary Fund (IMF), the Pakistani rupee on Tuesday continued to recover against the US dollar in the interbank market.
As per the latest statistics issued by the State Bank of Pakistan (SBP), the local unit gained Rs0.24, or 0.11%, against the greenback in the interbank market, closing at 220.65 compared to Monday’s close of 220.89.
Rupee regained ground following a decline in the Real Effective Exchange Rate (REER) index in September and on expectations of a fresh loan tranche from the Washington-based lender.
REER index depreciated to 90.9 in September, compared with 94.4 in the previous month, the State Bank of Pakistan reported on Sunday. The REER index shows the rupee might strengthen further in the coming days.
In addition, the expectation that Pakistan would meet its obligations to pay off its foreign debt on schedule contributed to a surge in the price of Pakistani sovereign bonds, which helped buoy sentiments regarding the local unit.
Analysts anticipate that the rupee will rise further as soon as World Bank inflows begin coming in as well. Meanwhile, Prime Minister Shehbaz Sharif is in Beijing to hold talks on the rollover of Chinese loans, which now total $26.7 billion and include public and publicly guaranteed debt.
Rupee becomes Asia’s best-performing currency
The Pakistani rupee had one of the strongest performances in Asia in October, rising by 3.3% against the dollar.
The Pakistani currency was closely followed by the Singapore dollar which appreciated by 1.38%, the Philippine peso (1.15%), and South Korean won (0.46%).
The rupee had a successful month. In October, the rupee value increased by 3.3%, said Topline Securities, which cited statistics from Bloomberg. The rupee was one of the best-performing currencies in Asia, it added.
After hitting historic lows in value in both July and August, the rupee suddenly began to appreciate in the final week of September. It started appreciating following the start of Ishaq Dar’s fourth term as Pakistan’s finance minister.
However, the local unit was under pressure on account of the political unrest brought on by the start of the PTI-long march towards Islamabad.
The rupee was able to gain ground thanks to Dar’s recent warning to speculators about currency manipulation and the decline of the REER.