Rupee Recovers After US Dollar Demand Starts Decreasing

The Pakistani Rupee (PKR) posted gains against the US Dollar (USD) in the interbank market today. It gained five paisas against the greenback after hitting an intra-day high of Rs. 176.55 against the latter during today’s open market session. It appreciated by 0.03 percent against the USD and closed at Rs. 176.63 today after losing a single paisa and closing at 176.68 in the interbank market on Monday, 10 January. The rupee managed to post gains against the USD after the local demand for the greenback declined marginally after the decision taken by the International Monetary Fund (IMF) to reschedule Pakistan’s Sixth Review under its Extended Funds Facility (EFF). Moreover, the beginning of the new year is yet to post detrimental results since the local credit demand is struggling to pick up the pace. While the private sector advances — aided by a seasonal upturn in the demand and a rise in the input price — observed stimulation during the second half of 2021, a similar forecast is yet to materialize as most of the country’s economic sectors explore newer venues to avail additional financing. Discussing the rupee’s near-term outlook earlier in the day, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, tweeted, “PKR ended flat yesterday, as demand for $ is thin. Due to [the] new year, credit request has not [been] picked & private sector activity is slow. While, SBP is confident that the ECO[nomy] will expand & attain 4%+ growth, but delay in rescheduling of 6th IMF review will slowdown pace of growth”. The PKR made a mixed showing of trends against other major currencies in the interbank currency market today. It posted losses of five paisas against the Euro (EUR) and three paisas against the Pound Sterling (GBP). On the contrary, it gained five paisas against the Australian Dollar (AUD), 20 paisas against the Canadian Dollar (CAD), and one paisa against both the Saudi Riyal (SAR) and the UAE Dirham (AED) in today’s interbank currency market.