Rupee up on rising reserves, remittances

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A currency exchange agent counts US Dollars at his company in Iraq’s southern city of Basra, on December 8, 2023. — AFP

KARACHI: The rupee appreciated in the interbank market on Friday as a result of a rise in foreign exchange reserves and remittances.The rupee ended the day at 278.12 against the US dollar, up from 278.20 on Thursday. It increased during the trading session by eight paias, or 0.03 percent.

Positive sentiment prevailed following the release of data by the State Bank of Pakistan, which revealed that as of May 3, its foreign reserves climbed to $9.12 billion—the highest since April 2022, thanks to the inflow of $1.1 billion from the International Monetary Fund as the second and final installment of a short-term stand-by arrangement.

Remittances from Pakistani citizens employed abroad also rose in April, reaching $2.8 billion, a 28 percent year-on-year increase. These inflows increased by 3 percent to $23.8 billion in the first ten months of fiscal year 2024.

“The local currency is supported by an increase in market dollar liquidity, as seen by improvements in FX and remittances,” a currency dealer said.“It is positive that while paying off external debt, the central bank has been able to improve foreign exchange reserves.

Along with healthy remittances, the market confidence is growing that Pakistan would report a current account surplus for April, which would relieve some pressure on the balance of payments,” the dealer added.

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