The Pakistani rupee registered significant gains against the US dollar, appreciating 1.8% in the inter-bank market during trading on Wednesday.
At around 12:45pm, the rupee was being quoted at 271.42 during intra-day trading, an improvement of Rs4.86.
The development comes as the market is optimistic that the IMF programme will resume soon, according to experts.
“Exporters are also selling their dollars into the market, as they believe that the rupee is fairly valued,” Samiullah Tariq, Head of Research at Pak Kuwait Investment Company Limited told Business Recorder.
He added that amid the free-float of the exchange rate, the inflows from illegal markets are diverting towards formal channels.
The rupee was under pressure against the US dollar on Tuesday, closing at 276.28 against the US dollar, a depreciation of Re0.98 or 0.35%.
Discussions between the government and the International Monetary Fund (IMF) regarding the unlocking of funds are underway. But it appears the government will have to re-legislate to raise Petroleum Levy from Rs50 to Rs70 per litre in order to generate Rs855 billion in the remaining months (February-June) of the current year based on current fuel consumption, exchange rate and international oil prices, an official of Petroleum Division told Business Recorder on condition of strict anonymity.
Internationally, the dollar eased on Wednesday after US Federal Reserve Chair Jerome Powell failed to offer fresh signs of a hawkish pushback against a resilient labour market, leading investors to bet that interest rates may not rise much further.
In a question-and-answer session on Tuesday, Powell acknowledged that interest rates might need to move higher than expected if economic conditions remained strong but reiterated that he felt a process of disinflation was underway.
Against a basket of currencies, the US dollar index steadied at 103.31, after slipping 0.3% in the previous session.
Oil prices, a key indicator of currency parity, were little changed on Wednesday amid subdued movements in the dollar, and as investors waited for more inventory data for more clues on demand trends.
This is an intra-day updateBusiness Recorder
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