Home Correction trading Dollar falls below Rs 170 in intraday trading

Dollar falls below Rs 170 in intraday trading

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KARACHI:

The current wave of rupee appreciation continued on Wednesday and the US dollar lost Rs 0.74 to Rs 169.8 on the interbank market during intraday trading.

The local currency has gained 5.47 rupees since reaching a high of 175.27 rupees against the greenback on October 26, 2021.

Speaking to The Express Tribune, Ismail Iqbal Securities, head of research Fahad Rauf, pointed out that the main reason for the local currency’s rebound in recent days was the $ 3 billion aid announced by the Saudi Arabia for Pakistan.

“Saudi aid played an important role in reversing the decline of the rupee, as it reversed the selling momentum in the forex market,” he said.

In addition, the real effective exchange rate (REER) – the cost of the country’s trade with the world – fell to 93-94 when the rupee broke the 175 rupee mark against the greenback, he said. . According to him, the rupee was highly overvalued at that time so a correction was expected sooner or later.

He added that a slight improvement in exports did not have much impact on the recovery of the rupee.

“However, exporters who held dollars while expecting the rupee to weaken further are now selling them, which in turn stabilizes the value of the local currency,” he said.

Endorsing his view, Intermarket Securities’ research chief Saad Ali pointed out that Saudi Arabia’s bilateral aid to Pakistan worth $ 3 billion was helping rupee recovery.

Right now, sentiment is ruling the market, he said.

Moreover, market participants are optimistic about the resumption of the International Monetary Fund (IMF) bailout program after financial adviser Shaukat Tarin and State Bank of Pakistan Governor Reza Baqir reiterated that ‘good news would be announced soon,’ he said.

Ali stressed that following an agreement with the IMF, a tranche of one billion dollars will be approved for Pakistan.


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