The Pakistani rupee increased versus the US dollar by the most in a single day as it maintained its upward trend in the interbank market for a fourth straight session as import pressure decreased in July.
The dollar depreciated by Rs9.58 during Wednesday’s trade, falling from Rs238.38 at Tuesday’s interbank close to Rs228.80.
A significant occurrence saw the dollar depreciate against the rupee by 4.19 percent, the most since November 2, 1998, when the dollar lost 5.10 rupees.
The dollar depreciated Rs14.50 in the open market, closing at 226, according to the Forex Association of Pakistan.
The rupee, one of the poorest performing currencies in the world, began losing momentum on Friday after falling for 10 straight sessions in the latter days of July and appreciating by around 5% just last week.
According to data from the Pakistan Bureau of Statistics (PBS), imports have decreased by 38.3 percent over the last month as a result of the government’s decision to prohibit a variety of luxury goods in order to address the country’s cash deficit.
The decline in imports was accompanied by a decline in exports as well. The trade deficit decreased by 18.3% to $2.64 billion in July 2022 from $3.235 billion in July 2021, easing pressure on the currency. The shortfall was $4.96 billion in June 2022.
Tahir Abbas, the head of research at Arif Habib Limited, told that the currency is stabilizing and likely to strengthen further as import pressure has decreased and demand has decreased.
External account numbers, according to capital market analyst Muhammad Saad Ali, are optimistic and will help the economy grow even more.
The International Monetary Fund (IMF) said that Pakistan has fulfilled the final prerequisite, namely raising the petroleum product tax, for the combined seventh and eighth reviews, which led to further strengthening of the currency.
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