Dollar slumps against rupee by 29 paisas

F.P. Report

KARACHI: The US dollar has slumped slightly against the Pakistani rupee by 29 paisas as the local unit insists on retaining its upward trajectory in the interbank trading.

According to the information provided by the forex dealers on Wednesday, the rupee in the morning trading activity fared well posting a gain of Rs1.04 against the US currency which traded at Rs216.75 by 10am in the interbank. But towards the noon, the US dollar edged up lowering its depreciation by 29 paisas, thus setting its exchange rate at Rs217.50 by 12pm in the interbank.

The value of US dollar is declining continuously as it was closed at Rs217.79 yesterday depreciating its worth by 0.08% against the local unit.

The rupee is showing resilience since Finance Minister Ishaq Dar took the charge of Finance Ministry and warned speculators of strict action for artificially appreciating the rate of dollar. He said that the actual rate of US currency should have been below Rs200.

The State Bank of Pakistan has started a crackdown on traders and commercial banks who were involved in the speculative trading which has enabled the local unit to resuscitate.

Besides this, the SBP has been providing liquidity to the market which is likely to help banks in releasing payments to clear import backlog.

Other factors which contributed to the reviving of rupee include declining gap between interbank and KERB; influx of dollars by the exporters in the local market who were earlier holding it due to constant appreciation of the greenback; and possible arriving of additional international commitments that comprise $1.5 billion from the ADB by the end of October, UN commitment of near $1 billion, $0.5 billion from Asian Infrastructure Investment Bank and $1 billion from the World Bank during a period between Oct and Dec.

The market was also upbeat about the resilience of rupee as the State Bank on Monday left its policy rate unchanged at 15 per cent for the next two months.