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Saturday, April 13, 2024

Rupee appreciates against dollar after 45 days of downfall

The Pakistani rupee bounced back on Monday by Rs2.62 to Rs237.03 against the US dollar in intraday trade in the interbank market.

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.

Read More: Miftah Ismail resigns as finance minister amid economic crisis

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.