Rupee continues uptrend against dollar for third consecutive session

• Pakistani rupee gains small ground against dollar.
• Rupee closes at 238.38 in interbank.
• It registers minor gain of Rs0.46 or 0.19%.

KARACHI: The Pakistani rupee continued to register gains against the US dollar for the third consecutive session in the interbank market on Tuesday — as the market remained stable after the government's surety of tackling the uphill economic task.

The dollar started losing ground on Friday after the rupee plunged for 10 straight sessions during the last days of July — and depreciated around 5% just last week.

At the close of Tuesday's interbank trade, the rupee registered another meagre gain of Rs0.46 or 0.19% and reached 238.38, up from 238.84 in the last trading session. Meanwhile, the currency value remained unchanged at 241 in the open market.

The local unit — which is currently ranked among the worst performing currencies globally — took a battering in July in the interbank and open markets. In the last four months, the rupee has depreciated by about Rs60.

A day earlier, the Ministry of Finance and the central bank, in a joint statement, assured that the country’s problems were temporary and being forcefully addressed.

The statement assured that all prior actions for the International Monetary Fund's (IMF) review were completed and the Executive Board's meeting for the release of the $1.2 billion loan is expected in a couple of weeks.

It also mentioned that macroeconomic policies — both fiscal policy and monetary policy — have been appropriately tightened to reduce demand-led pressures and rein in the current account deficit, which is a major challenge for the government.

The SBP and finance ministry said that the rupee has been overshot temporarily, but it is expected to appreciate in line with fundamentals over the next few months.

Around half of the rupee depreciation, since December 2021 can be attributed to the global surge in the US dollar, following historic tightening by the Federal Reserve and heightened risk aversion, they said, noting that the market sentiment has also played a major role in this regard.

"This uncertainty is being resolved, such that the sentiment-driven part of the Rupee depreciation will also unwind over the coming period," the statement said.