By Ali Imran
ISLAMABAD: The rupee rose further on Tuesday, dipping below Rs290 against the US dollar by day’s end in the interbank market, which analysts attribute mainly to the clampdown on the money market.
As trading in the interbank market closed, the rate for the dollar was Rs289.80, according to the State Bank of Pakistan, down by Rs1.06 from yesterday’s close of Rs290.86.
Today’s gains extend the upward trajectory that has continued since the army-backed crackdown on the illegal trade of the dollar began earlier this month.
The rupee also made headway in the open market against the dollar, which was trading for Rs292 compared to the previous day’s Rs293, according to Exchange Companies Association of Pakistan.
Saad Bin Naseer, director of financial services platform Mettis Global, said that today marked the 16th consecutive day of PKR appreciation, which “amounts to almost a 6 per cent increase”.
“This surge is primarily attributed to administrative measures,” Naseer told Dawn.com. “The government’s assessment is accurate, as it appears that speculative elements contributing to rupee depreciation are being addressed through crackdowns.”
Naseer said if this trend continued and the Afghan border remained sealed, the rupee is likely to appreciate further in the future. “However, for long-term stability, we must focus on attracting foreign direct Investment (FDI) into export-oriented sectors.”
However, some analysts highlighted that the current gains are short-term. “Looks sustained in the short term,” said Khurram Schehzad, chief executive of Alpha Beta Core.
“For long-term sustainability, we need dollar inflows from remittances, exports and foreign investments.”