The rebound, accompanied by a stocks recovery, is being seen as an ongoing market correction.
By Staff Reporter
KARACHI: The Pakistani rupee continued its rally against the US dollar overnight on Thursday after staging an initial recovery Wednesday on the back of multiple positive reports concerning the government’s macroeconomic options.
The rupee appreciated by PKR 3 to reach PKR 207.50 to a dollar at 11:04 am after closing the previous day at PKR 210.50, according to Forex Association of Pakistan.
According to Mettis Global News, the local currency unit was being quoted at 208/209 per USD at 10:35 am PST, compared to the previous close of PKR 211.93 per USD.
Analysts say the PKR 4 a dollar gain in the interbank market is the beginning of a larger market correction due after the lifting of the pall of pessimism that hung over the country’s macroeconomic prospects.
The rally began after reports of broad agreement with International Monetary Fund (IMF) over budget and approval of a USD 2.3 billion loan from Chinese banks trickled in one after the other on Thursday.
Another factor contributing to the buoyancy of the rupee could be exporters selling their dollar holdings on the interbank market. Traders said exporters sold approximately USD 150 million early Thursday.
But the fundamental recovery is broader, as reflected by the stocks chiming right in to the rupee’s rally by starting a recovery of their own.
By 12:00 midday Thursday, the KSE 100 Index was up by 306 points or 0.72 percent, standing at 42,764.14 with a volume of 71.27 million shares.
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