Friday May 12, 2023
KARACHI: The Pakistani rupee on Friday recovered sharply to rise on the back of an improved political situation and a drop in demand from importers after falling to an all-time low of Rs 300 a day earlier.
The local unit pared losses sharply by gaining Rs 12.43 per US dollar to trade at 286.50 on the interbank market after falling to 300 in the last trading session.
The recovery came after two major events occurred in the last few hours.
First, the currency strengthened after import demand eased relatively as oil payments were released a day earlier, according to market talks.
Second, the Supreme Court on Thursday declared the arrest of Pakistan Tehreek-e-Insaf (PTI) president Imran Khan illegal and ordered the authorities to "release him immediately".
Arif Habib Limited head of research Tahir Abbas said that a day earlier, when the rupee touched an all-time low of 300, demand for the US dollar was greater as imports had to withdraw their due payments; however, today the demand is relatively less.
"Less demand coupled with an improved political situation has led to this sharp recovery," he told Geo.tv.
Abbas recalled that the local unit had lost over Rs 20 in the last three days; however, the currency remains volatile as uncertainty surrounding the International Monetary Fund (IMF) program has fueled fears of a default.
Therefore, the foreign exchange market did not react negatively to Finance Minister Ishaq Dar's call, where the senator claimed that Pakistan was defaulting even in the absence of an IMF program.
