Policy status quo helps rupee resume uptrend

Pakistani currency resumed its uptrend on Tuesday after dropping a little bit a day ago, reaching over three-month high at Rs279.55 against the US dollar in inter-bank dealings.

The rupee got renewed support from the central bank’s decision to leave its benchmark policy rate unchanged at a record high of 22% for the next six weeks. The high cost of bank borrowing discourages imports, controls the soaring inflation and keeps demand for the greenback low compared to inflows in the economy.

According to State Bank of Pakistan’s (SBP) data, the domestic currency appreciated 0.03%, or Rs0.09, on a day-on-day basis in the inter-bank market. With the latest rise, the currency has cumulatively increased 9.85%, or Rs27.55, in the past four months since hitting the record low at Rs307.10/$ in the first week of September 2023.