The US dollar’s decline into its third straight session on Tuesday was accompanied by further improvements for the Pakistani rupee.
Tuesday saw the dollar depreciate by Rs3.20 against the rupee and was trading at Rs234 in intraday trade on the interbank market as of 10:30am. This comes after multiple sessions in the previous trading week saw the local currency experience back-to-back losses.
Only two days into the trading week, the dollar has already lost Rs5.15 in the interbank market.
After steadily declining against the dollar for 15 straight sessions, the local currency finally ended its losing streak on Friday, the final trading day of the previous week.
Despite deadly floods destroying Pakistan’s economy, the rupee came close to hitting a record low of 240 versus the dollar but was unable to do so following many positive signs.
According to Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP), the market appears to be reacting to the arrival of PML-N leader Ishaq Dar and the announcement that he will succeed Miftah Ismail as finance minister.
Dar has returned to Pakistan after five years of self-imposed exile in London to “facilitate” the government in its efforts to resurrect a cash-strapped economy by taking over the key portfolio of the finance ministry.
Apart from Dar’s announcement, Paracha noted that the market players were noting political stability as well — after PTI Chairman Imran Khan stated he could return to parliament if the alleged cipher — purportedly containing threatening text behind his government’s ouster — is probed.
The International Monetary Fund’s (IMF) promises to assist Pakistan, the World Bank’s announcement regarding the repurposing of funds, and the assistance from the Asian Development Bank, according to the ECAP general secretary, have raised market expectations.