Rupee strengthens against US dollar

• Rupee gains 0.07% to close at Rs181.69 against US dollar.
• Local unit continues to gain ground on slowdown in demand for US currency.
• Pakistani rupee has depreciated by Rs24.15 since July 1, 2021.

KARACHI: The rupee strengthened against the US dollar at Rs181.69 in the inter-bank market on Thursday compared with Tuesday’s close of Rs181.82, according to the State Bank of Pakistan (SBP).

Currency dealers said that the domestic currency continued gaining ground on slowdown in the demand for the US currency from importers and an optimistic economic outlook amid political stability.

Read more: Rupee can strengthen to 160 against US dollar in few months, says Ishaq Dar

The rupee has maintained a downward trend for the last 11 months. It has lost 19.32% (or Rs29.41) to date, compared to the record high of Rs152.27 recorded in May 2021.

With a fresh rise of 0.07%, the Pakistani rupee has depreciated by 15.85% (or Rs24.15) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

The political stability after new Prime Minister Shehbaz Sharif took office and likelihood of resumption of stalling International Monetary Fund’s $6 loan programme helped the rupee gain in the last five sessions.

Read more: Pakistan's remittances reach historic high of $2.8 billion in March

The rupee hit all-time lows since the vote of no-confidence moved against former prime minister Imran Khan. The political vacuum of having no government, deferment of the International Monetary Fund (IMF) programme, lack of clarity of China’s roll in deposit and reduction in the foreign exchange reserves had contributed to the rupee’s slide.

A day earlier, former finance minister and PML-N leader Ishaq Dar maintained that the rupee-dollar parity will improve once Pakistan’s economy is steered in the right direction, citing the previous government’s “incompetence” as the prime reason behind the rupee’s record-breaking downward streak.

During the PML-N's tenure, the government kept the rupee strong against the US dollar which irked the International Monetary Fund (IMF) and exporters, who argued that keeping the currency “artificially strong” negatively affects the economy in the long run.

He further revealed that the US dollar can come down to Rs160 in a few months when “fiscal and monetary policies are fixed."