After hitting a record low, the rupee made a decent recovery against the US dollar, appreciating nearly 0.65% in the inter-bank market on Wednesday as the pressure due to import payments seems to have subsided.
As per the State Bank of Pakistan (SBP), the currency closed at 201.52 after a day-on-day appreciation of Rs1.31, or 0.65%.
The recovery comes after the rupee closed at 202.83 against the US dollar in the inter-bank market on Tuesday, the lowest closing level in history.
Heavy oil payments: Rupee drops to record low, closes at 202.83 in inter-bank market
“Improvement in rupee comes as the likely completion of oil import payments has diffused demand for dollar in the market,” Tahir Abbas, Head of Research at Arif Habib Limited (AHL), told Business Recorder.
Meanwhile, the government has also moved to pacify economic sentiment in the country, taking various measures as it looks to rein in current expenditure.
At the same time, addressing a pre-budget seminar in Islamabad on Tuesday, Finance Minister Miftah Ismail said that the government would unveil a progressive fiscal consolidative budget designed to reduce the fiscal deficit below five percent without affecting the growth by much.
Furthermore, Prime Minister Shehbaz Sharif, in his remarks at the concluding session of the day-long pre-budget business conference, stated that the “charter of economy” is the need of the hour for the continuation of economic policies.
On the other hand, General Secretary of Exchange Companies Association of Pakistan (ECAP) Zafar Paracha expressed concern over currency volatility. The rupee has seen wild movements in either direction during the last three months.
“This is especially strenuous for foreign investors involved in the stock and currency markets,” he said.