Rupee ends depreciation, settles at 220.89

The rupee has ended its three-session depreciation run against the US dollar settling with a significant gain of 0.72 percent in the inter-bank on Monday.

The local currency closed at 220.89 after an appreciation of Rs1.58, according to the State Bank of Pakistan (SBP). Since October 13, the rupee has decreased by Rs5.67 or 2.56 percent against the US dollar.

According to analysts two factors have mainly helped in the rupee’s gain against the greenback. They have said that Prime Minister Shehbaz Sharif’s upcoming visit to China is being expected to enhance trade and business ties.

Real Effective Exchange Rate (REER) index depreciation to 90.9 in September compared to 94.4 in August. REER is used to evaluate the fluctuations of a currency. It is also used in the assessment of international trade.

Economic experts have also said that the expected pouring in of the inflows from the World Bank has helped the local currency while importers who had held their shipments on hold were seeking to stockpile their materials in anticipation of future disruptions.

Finance Minister Ishaq Dar’s meeting with CEOs of commercial banks and heads of exchange companies has also been attributed to the rupee’s recovery. Dar had warned smugglers to refrain from trading dollars and hoarding or warning of strict action was given in case of non-compliance.

Saudi Crown Prince Muhammad Bin Salman’s expected visit to Pakistan is also being taken as positive as multi-billion dollar investment has been expected.

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