Rupee continues to recover, gains Rs1.75 against US dollar as political turmoil eases

• Analysts believe much-needed clarity on the political front reinvigorated investors' confidence in riskier assets.
• Rupee gains Rs1.75 against the US dollar.
• Local currency closes at Rs182.93 in the inter-bank market.

KARACHI: The Pakistani rupee’s uptrend persisted on Tuesday as the currency gained 0.96%, or Rs1.75, against the US dollar in the inter-bank market, closing at Rs182.93.

There has been a concern about what would happen if the political conditions don't normalise, however, following an end to the controversial no-confidence motion drama the currency market reacted positively to the fast-changing political developments.

Analysts and currency dealers believe that much-needed clarity on the political reinvigorated investors' confidence in riskier assets.

Moreover, the local currency recovered in view of the interest rate hike and the State Bank of Pakistan’s (SBP) measures to cut imports and reduce inflationary pressures.

It is worth mentioning that last week, the central bank in a surprise move jacked-up benchmark interest rate by 250 basis points to 12.25%.

The rupee has maintained a downward trend for the past 11 months. It has lost 20.13% (or Rs30.66) to date, compared to the record high of Rs152.27 recorded in May 2021.

With a fresh rise of 1.9%, the Pakistani rupee has depreciated by 16.11% (or Rs25.39) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

Meanwhile, open market forex rates of other currencies against the Pakistani rupee are as follows: