Rupee depreciates against dollar after 28 consecutive gains

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Rupee depreciates against dollar after 28 consecutive gains. Analysts say the Pakistani rupee fell Tuesday after 28 consecutive days of gains against the US dollar.

According to the State Bank of Pakistan (SBP), the local currency fell by Re0.2 or 0.07% against the dollar, closing at 277.03, down from 276.83 yesterday.

For 28 consecutive sessions, the rupee has gained 10.9% or Rs30.3 against the greenback.

Strong dollar inflows caused by exporters’ continuous dollar sales boosted the local currency, anticipating more rupee appreciation in the near future. As a result, exporters also sold dollars in the forward market.

Arif Habib Limited (AHL) Head of Research Tahir Abbas told that a correction was inevitable due to a continuous appreciation of the rupee.

According to Abbas, the rupee’s movement will also be determined by Pakistan’s IMF review in November.

According to the analyst, the currency’s direction will most likely be determined by our multilateral inflows, imports, and remittances trends.

Samiullah Tariq, Pakistan-Kuwait Head of Research, agreed with Abbas that a correction was necessary.

Pakistan’s economic stabilization programme was supported by a $3 billion Stand-By Arrangement (SBA) approved by the IMF in July.

An immediate disbursement of $1.2 billion was approved by the Executive Board. In November, the first of two quarterly reviews will assess whether the remaining amount should be phased in over the duration of the programme.

According to Raza Jafri, head of Equities at Intermarket Securities, the rupee may consolidate around current levels.

Nevertheless, based on just REER alone, the currency appears fairly valued for now, if meaningful inflows occur.

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