Rupee up Rs1.04 despite dollar's gains in global markets amid Middle East turmoil
Last updated on: 09 October,2023 12:18 pm
Greenback is growing stronger in world markets for being a safe haven
KARACHI (Dunya News/Web Desk) – The rupee is able to the sustain the surge as it gained another Rs1.04 against the US dollar which was available for Rs281.65 in early interbank trading.
On Friday, which was the last working day of the previous week, the exchange rate had closed at Rs282.69.
Interbank closing #ExchangeRate for todayhttps://t.co/aYFAx4CjUk#SBPExchangeRate pic.twitter.com/FwC61gTGSG
— SBP (@StateBank_Pak) October 6, 2023It means the rupee has so far gained Rs25.45 since reversing the trend which saw the local currency sliding down to the level of Rs307.10 against the greenback – the worst in Pakistan’s history.
As far as the open market is concerned, the dollar was being traded for Rs281.50 after another Rs1 depreciation, which translates into a total gain of Rs51.50 since nosediving to a record low.
The latest gains come as the dollar was moving upward trajectory against all major currencies after markets opened on Monday for the first since Hamas-led Palestinian attack on Israel – a development that also saw oil prices jumping – Brent futures 3.59 per cent and WTI futures by 3.85 per cent so far (11.06am PST).
Read more: Save haven dollar, yen gain on flight to safety as Hamas attack dents sentiment
As reported earlier, the violence in Israel is prompting a move into safe-haven assets as investors closely watch events in the Middle East to gauge the geopolitical risk to markets.
Read more: Attack on Israel could boost appeal of gold and safe haven assets
Rising geopolitical risk would see buying in assets like gold and the dollar, and boost demand for U.S. Treasuries, which have been sold off aggressively, analysts said over the weekend. As trading started in Asia on Monday those themes played out. US stock futures slid, while crude, gold and Treasuries got a boost.
Thus, the Pakistan rupee is continuously defying the global trend that has affecting the currency markets around the world in recent months.
What is the reason? Although Pakistan facing a severe economic crisis, the record depreciation experienced by rupee was a product of market manipulation – hoarding, illegal trading and cross-border smuggling – and the government has launched a successful crackdown on the elements involved in these practices.