The Pakistani rupee appreciated by Rs0.13 to close at Rs278.37 against the US dollar in the inter-bank market, reversing a three-day decline. This upturn came after Pakistan received significant inflows of nearly half a billion dollars from multilateral agencies, boosting the country's foreign exchange reserves to a two-year high of $9.39 billion, according to State Bank of Pakistan (SBP) data.
Earlier in the week, the rupee had weakened by Rs0.16 against the dollar amidst speculation of impending devaluation ahead of anticipated IMF bailout negotiations. Additionally, increased demand for foreign currency for imports had contributed to the initial decline.
Financial analysts suggest that both the currency and imports are likely to stabilize in the short term, leveraging the bolstered foreign exchange reserves. Despite the recent influx, however, the local currency closed slightly weaker in the open market, ending at Rs280.35/$, as reported by the Exchange Companies Association of Pakistan (ECAP).
The recent developments indicate a dynamic period for Pakistan's currency market, influenced significantly by external financial support and domestic economic conditions.