Federal Budget

Rupee grows stronger, gains Rs4 against dollar in open market

Rupee grows stronger, gains Rs4 against dollar in open market

Business

Local currency maintaining trend since June 1

KARACHI (Web Desk) – The Pakistani rupee made more gains against the US dollar on Tuesday in open market as the local currency was up by Rs4 with the exchange rate improving to the level of Rs291, thus sustaining the overall movement in upward trajectory since the start of this month.

The local currency has made considerable gains over the past weeks after being traded up to Rs316 as the paucity of foreign reserves and the resultant hoarding/ blacking marketing created a huge difference between the official exchange rate and the open market.

At one point, the dollar even in interbank had surged to Rs298.93 on May 12. However, the difference has now been narrowed down to less than Rs5 as the interbank rate recorded on Tuesday noon was Rs287.25.

It had started on June 1 when the central bank, a day earlier, allowed authorised dealers [banks] to purchase US dollars from interbank for settlement of card-based cross-border truncations with International Payment Schemes (IPSs).

As a result, the dollar witnessed a record single-day decline after the local currency gained Rs19 after weeks and months of sustained losses – down to Rs298 against the previous session’s value of Rs316.

Government intervention to control the exchange is one of the main objections raised by the IMF despite the fact that devaluation and record-high key policy [interest] rate – also advocated by the world’s top lender – have crippled Pakistan’s economy and produced highest-ever inflation in the country’s history.

Earlier in the day, it was reported that the ongoing talks between Pakistan and the IMF had failed, meaning that the country would no more get any money from the world’s top lender as the current programme expires on the 30th of this month.

Although the finance ministry tried to convince the IMF by explaining Pakistan’s position on different reservations and conditions, the process led by Finance Minister Ishaq failed to produce the desired results.