In intraday activity on the interbank market on Monday, the Pakistani rupee recovered by Rs2.62 to Rs237.03 against the US dollar, strengthening for the first time in the previous month and a half.
The recovery occurs a few days after it was revealed that former finance minister Ishaq Dar, who is infamous for manipulating the rupee, had returned after living in self-exile for five years.
Dar will take over as finance minister after Miftah Ismail resigned from his position a day earlier.
Last week, the rupee effectively avoided further decline below its record low of Rs239.94.
— SBP (@StateBank_Pak) September 26, 2022
Prior to that, between August 2 and September 22, 2022, it lost 12% (or Rs25) of its value over 15 straight working days, reaching Rs229.71 versus the US dollar. Following a nine-month high recovery in international oil to less than $80 per barrel as opposed to $116 per barrel in June 2022, the rupee has experienced the most recent recovery.
Pakistan is significantly reliant on energy imports. 25% of the $84 billion in imports during FY22 were for energy. On anticipated inflows of a few billion dollars from international creditors in the upcoming weeks and months to aid Pakistan in its fight against flood devastation, the rupee has also recovered.
Furthermore, Miftah Ismail, a former finance minister, stated unequivocally that Pakistan would not skip out on the payment of its international obligations in December 2022. In addition, the nation has attempted to reschedule its $10 billion Paris Club debt, which has nothing to do with Pakistan’s commercial loans, as well as a $1 billion loan that is due on December 5, 2022, to international bond investors.