Federal Budget

'Safe-haven' dollar bounces back over Rs280 amid buying spree

'Safe-haven' dollar bounces back over Rs280 amid buying spree

Business

Pakistan is again witnessing buying pressure amid global economic uncertainty

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KARACHI (Dunya News/Web Desk) – The US dollar gained another Rs1.07 against the Pakistan rupee in interbank trading on Wednesday, increasing the official exchange to over Rs280 yet again, as the local currency couldn’t sustain the surge that saw it bouncing back from a historic low.

Last week, the dollar exchange rate had reached Rs280.29 after a weeks-long rally saw the rupee strengthening to the level of Rs276.83 on Oct 16.

By the time this report has been filed around 12:30pm, the dollar is traded for Rs280.50 against the previous closing of Rs279.43.

Earlier, the dollar had halted the rupee’s upward movement last week on Oct 17 with a 20-paisa gain after the local currency recovered from the Rs307.10 level thanks to a government crackdown on market manipulators.

As a result, those involved in stashing the greenback were forced to sell it to maximise the gains. However, the increase in demand since last week – which, according to some circles, is a product of profiteering – meant that the rupee isn’t able to reach the Rs250 level in official exchange rate, as expected by several market experts and players.

People will be watching the developments closely as an IMF team is set to arrive in Pakistan on Nov 2. The conditions and targets prescribed by the world’s top lender are going to be focus of these talks with the release of the second tranche being dependent of their success. Privatisation of loss-making state-owned enterprises is also expected to dominate the agenda.

However, the government earlier week raised the gas prices as demanded by the IMF with a stated aim of reducing the fiscal deficit, raising the hope that the Washington-based international financial institution would be satisfied by the progress made by Islamabad so far.