On Monday, the US dollar dropped to Rs183, with analysts forecasting a further drop in the greenback in the coming days.
The dollar drop to Rs183 in the interbank market at 12:01 p.m., according to the Forex Association of Pakistan, a loss of Rs1.68. After rebounding from a low of 188.18, the rupee closed the week at 184.68 to the dollar.
President of Pakistan’s Forex Association, Malik Bostan, credited the rupee’s rise to the country’s political stability. “After a time of uncertainty, the rupee has recovered,” he said.
He also predicted that discussions with the International Monetary Fund (IMF), which had been stalled, would be “smooth” once the new administration takes over. Bostan predicted that the dollar will go below Rs180 this week.
Political stability, according to Zafar Paracha, head of the Pakistan Exchange Companies Association, will assist restart the stalled IMF program, restoring business confidence, and attracting international investment.
“This will enhance the availability of dollars, causing the rupee to rebound more quickly,” he said.
The local currency bond market, according to Mohammad Sohail, CEO of Topline Securities, is also rebounding with the rupee and the stock market, which gained over 1,300 points on Monday. “In the previous four days, Pakistan Investment Bonds (PIBs) have dropped over 60-70 points,” he remarked.
The rupee soared 1.9 percent versus the dollar in the interbank market on Friday, a result mostly ascribed to the Supreme Court’s decision to reinstate the National Assembly and the central bank’s move to raise the policy rate by 2.5 percent.
The Supreme Court’s judgment, according to market specialists and currency traders, has dissolved the uncertainty that has gripped the speculative market for a long time.
However, they say that the exchange rate is still vulnerable to several variables, including low foreign exchange reserves and the incoming government’s economic plans.