KARACHI: The Pakistani rupee on Thursday recovered by 22 paisa against the US dollar and hit Rs158.22 in the interbank market with slight fluctuation at the early trade hours.
Ahead of Eid-ul Azha, Pakistan had received higher remittance inflows from overseas Pakistanis in the first month of July of the current fiscal year 2019-20 – which in turn assisted the local currency in recovering against the greenback.
Currency traders were of the view that the increasing inflows of remittance in connection with Eid-ul Azha had supported the local rupee in the market. According to them, the majority of inflows had come from Saudi Arabia and other Gulf countries, including the United Arab Emirates (UAE).
In the earlier weeks, the rupee had been observed to cumulatively depreciate against the greenback, which in turn had resulted in increased prices of goods and hardships for the general public.
The SBP let the rupee depreciate significantly in the inter-bank market after finalising an agreement with the International Monetary Fund (IMF) for a loan programme on May 12.
The IMF has asked Pakistan to end state control of the rupee and let the currency move freely to find its equilibrium against the US dollar.
On the other hand, the World Bank Group has also supported the idea of leaving the rupee free from state control in an attempt to give much-needed boost to exports and fix a faltering economy.
In previous weeks, the local currency depreciated massively despite receiving the first tranche of $991.4 million from the International Monetary Fund (IMF).
The stringent conditions – on which the global moneylender has formally approved the bailout package of $6 billion for Pakistan – seem to have exerted more pressure on the local currency.
The gradual drop in the rupee had come due to high demand for the dollar against thin supply as the country continued to make aggressive international payments to partially pay off huge foreign debt and for imports.