The Pakistani rupee recovered significantly against the US dollar on the open market and was trading at 325 during trade on Tuesday, as the gap with the inter-bank rate shrank.
According to dealers contacted by Business Recorder, the rupee was quoted at 325 for selling and 322 for buying reasons for consumers in the open market, down Rs5 from Monday’s levels of 330 and 327.
During trade, the Exchange Companies Association of Pakistan (ECAP) also quoted rates of Rs325 and Rs322.
However, the rupee remained under pressure in the interbank market, hovering at 306 against the US dollar.
Currency dealers attributed the reduction in currency depreciation to Chief of Army Staff (COAS) Asim Munir’s recent meeting with the business community on Sunday.
The army chief reviewed the government’s economic policies and intentions to combat smuggling and speculative activities during the meeting.
Meanwhile, analysts have pointed out that supply and demand forces are at work. “There are no buyers, only sellers in the market,” one analyst stated.
One of the structural standards set by the Washington-based lender for Pakistan is a rate differential of less than 1.25% between interbank and open market rates.
Despite the recent decrease, the gap – referred to as the premium by the IMF in its country report on Pakistan published following the Executive Board’s adoption of the Stand-By Arrangement – remains larger than the prescribed threshold.
Concerns over Pakistan’s rising imports as restrictions ease, a widening current account deficit, and declining foreign exchange reserves have revived pressure on the rupee.
