Pakistan rupee jumps to 3-week high against dirham

Dubai - Pakistani currency gains one rupee versus dirham and four rupees against dollar in a day.

Pakistani rupee made strong recovery against the US dollar and UAE dirham on Friday after International Monetary Fund approved $1.4 billion emergency aid for Islamabad to counter the impact of coronavirus on the economy.
Data from xe.com showed that the Pakistani currency gained over one rupee or 2.4 per cent, rising from 45.6 per dirham to 44.5 to hit three-week high on Friday. It strengthened from 167.352 on Thursday to 163.315 on Friday against greenback.
After a sustained appreciation since July 2019, the rupee had depreciated by 7.2 per cent during March 2020. Similarly, the State Bank of Pakistan (SBP) foreign exchange reserves, which had increased to $12.8 billion by end-February from $7.3 billion at end-June 2019. But foreign exchange reserves fell below $11 billion by end-March.
The Central Bank on Thursday cut the policy rate by two per cent to nine per cent and has intervened in the forex market to prevent disorderly marker conditions. Importantly, it has allowed the exchange rate to act as shock absorber, accommodating an eight per cent depreciation of the exchange rate versus the US dollar, and only intervening in the foreign exchange market to avoid disorderly market conditions and excessive rupee volatility.
"While uncertainty remains high, the near-term economic impact of Covid-19 is expected to be significant, giving rise to large fiscal and external financing needs. The IMF support will help to provide a backstop against the decline in international reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing the pandemic and mitigating its economic impact," IMF said on Friday.
waheedabbas@khaleejtimes.com

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