Rupee soars to 22-month high against dollar in early trade

The rupee appreciated by over 93 paisa, or 0.61 per cent, against the US dollar in the first 30 minutes of trade at the interbank on Tuesday.

The dollar was being quoted at Rs153.10 at 10:05am compared to the previous day’s close of Rs154.0379.

Having gained Rs5 or 3.27pc against the dollar in March alone, the rupee is currently at a 22-month high and trading at levels last seen in June 2019.

“The revival of International Monetary Fund’s program and the approval of $500 million by their board has lent support to the rupee. On top of that, other multilateral organisations including $1.3 billion from the World Bank have further improved the fundamentals,” said Malik Bostan, President of the Forex Association of Pakistan.

Speaking of the market dynamics, he said the demand is quite low and is mostly driven for education-related reasons for students studying abroad. However, there is an abundance of supply with exchange companies alone receiving $7-8 million a day at their counters. This liquidity is then deposited in the interbank market.

He also credited the Roshan Digital Accounts for the rupee’s recent gains.

Former Secretary General of Exchange Companies Association of Pakistan, Zafar Paracha, seconded this view.

“The State Bank’s initiatives are beginning to bear fruit now as an ever greater number of transactions are being routed through formal channels,” he said.