Rupee Rises Rs1.7 Versus The Dollar In Interbank Trading As The Uptrend Continues
October 5, 2022 / By Zunair Tahir / Business News
On Wednesday, the rupee extended its gains against the dollar, increasing by almost Rs1.7 in the interbank market at close.
The State Bank of Pakistan reported that the exchange rate of the local currency for the dollar was Rs223.94 (SBP). This is a rise of 0.76 percent from the close of Rs225.64 yesterday.
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According to earlier Forex Association of Pakistan (FAP) statistics, the rupee increased by Rs2.04 (0.9%) versus yesterday’s close of Rs225.64 late afternoon. Later, it rose by 30 piastres.
Analysts have mostly linked the rupee’s strengthening to the country’s September import bill decrease and anticipations that the incoming finance minister, Ishaq Dar, will take action to stabilize the present exchange rate.
“The PKR is benefiting from September’s reduced imports. It’s also rumored that the incoming finance minister will act to stabilize the local currency. Chief Executive Officer of the brokerage firm Topline Securities, Mohammed Sohail
Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (Ecap), cited two more explanations for the rupee’s upward trend: a decrease in the import bill from the previous month and a monthly decrease in the trade deficit of 20 percent.
He said that the rupee was anticipated to continue its gains in the next days as a result of these factors. “Inflation is also dropping, enhancing prospects of no additional restrictive measures in the monetary policy,” he said.
Paracha further connected the strengthening of the rupee with “tight measures” adopted by the government.
In this context, he emphasized in especially the new finance minister’s efforts against hawala/hundi networks. He said that after the event, components that had been “artificially raising” the value of the dollar began to sell hoarded currency.
He said that as a result, a decrease in the demand for dollars on the open market was also noted.
The government has taken a number of steps, including opening an investigation into banks’ involvement in exchange rate manipulation.
On Tuesday, Jameel Ahmad, the governor of the State Bank of Pakistan (SBP), informed the National Assembly’s Standing Committee on Finance and Revenue that inquiries had been opened against eight institutions.
According to Ahmad, the initial part of the investigation focused on Bank Al Habib, Habib Bank Limited, National Bank of Pakistan (NBP), Meezan Bank Limited, United Bank Limited (UBL), Allied Bank Limited (ABL), and Standard Chartered. He omitted to mention the eighth bank, though.
He informed the tribunal that ABL, NBP, and Standard Chartered had received show-cause letters and that the remaining institutions would be under investigation in the ensuing stage.
He had stated, “This is not the appropriate spot where the rupee sits at the present time,” and he had added that he was aware that certain speculators were playing this game and that they need to cease right once.
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