Rupee Strengthens Against US Dollar A Day Before Elections

The Pakistani rupee reversed losses against the US Dollar today after opening trade at 279 in the interbank market. It was bullish against the greenback, rising as high as 278.7 against the $ during intraday trade today. The interbank rate hovered between 278 and 279 before closing at the same level for the remainder of the day. Open market rates across multiple currency counters were in the 278-280 range today. At close, the PKR appreciated by 0.03 percent to close at 279.34 after gaining eight paisas against the dollar today. The rupee closed in the green having snapped its 4-day winning streak a day earlier. On a fiscal year-to-date basis, it has so far appreciated by 2.36 percent. Overall, the rupee is down nearly Rs. 60 since January 2023. Since April 2022, it is down over Rs. 107 against the greenback. As per the exchange rate movements seen today, the PKR gained eight paisas against the dollar today. Market talk hints that the currency may exhibit extremely volatile trends after elections tomorrow. With or without a peaceful electoral process, the country is still poised to get a new IMF loan program, potentially a bigger one with long tenure, once the current one ends in March. The new package will give time and money to the country’s new leadership to introduce reforms and help the economy grow, a trader commented while talking to ProPakistani. In a key development, S&P Global Ratings said in a note on Pakistan that together with new policy moves to improve investor confidence and bring down inflation, this could lift fiscal and external metrics sufficiently for the sovereign ratings to move to the ‘B’ rating category. It further stated that if the coming elections yield a government that has popular support and is able to work with key institutions in the country, it will have a better chance of securing external financing from IMF. The PKR was red against most of the other major currencies in the interbank market today. It lost 11 paisas against the Euro (EUR), 40 paisas against the Australian Dollar (AUD), 46 paisas against the Canadian Dollar (CAD), and Rs. 1.63 against the British Pound (GBP). Conversely, it gained against the Saudi Riyal (SAR) and the UAE Dirham (AED) in today’s interbank currency market.