According to the State Bank of Pakistan PKR closed at 229.63 after recovering 1.08 percent from yesterday’s close of Rs232.12.
The rupee has improved over the past few days, with a drop to Rs 239.9 from its September 22 peak of Rs 284 (the US $0.372).
The sentiment changed mainly because of Ishaq Dar’s return as Finance Minister, which is causing supporters to invest in the Pakistani Rupee currency.
Earlier, when the rupee continued to weaken there was news such as that the World Bank and Asian Development Bank were going to send more funds, However, with all of these positive developments, the rupee has recently stopped weakening. Now because of Mr. Dar’s control over the value of the dollar and his management of the economy, there is hope for improvement.”
Dar is most well known for his previous support of the central bank to heavily inject foreign exchange into the market to prop up the rupee and keep the dollar’s value around Rs90
Mr. Paracha said Pakistan is different now because of the conditions of the International Monetary Fund’s ongoing program, under which Pakistan has agreed to a market-based exchange regime with foreign currency.
Debt Reduced By Rs1 trillion
Pakistan’s external debt has decreased by around 1 trillion Rupees in the last four days. The uptrend is welcome, with mixed sentiments.
“Investor confidence needs to be sustained without a widespread concern about the government.The government must take action to adjust the systems in place so that speculative investment can be met with stability
He noted that Pakistan was facing a shortage of foreign currency in the long run and that though it would have to make payments of $30-40 billion this year, arrangements for only $10 billion had been made.
He suggests that the government should reduce imports and increase exports, as well as reexamine trade and immigration policies with Afghanistan and Iran since they drained the country’s foreign exchange and reserves.
Komal Mansoor, Head of Research at Tresmark, said that the Pakistani Rupee was strengthening because of Dara’s “fixation” on having a stronger rupee.
“Many analysts are citing possible parity to touch 220 levels,” and “the ambitious ones are expecting levels around 200,” commented the IMF’s spokesperson. “Anything like this should be done after consulting with all stakeholders, especially the IMF.”
