Pakistan rupee gains 15-day high against US dollar

KARACHI - The Pakistan rupee recovered by 3 per cent to a 15-day high against the US dollar following last week's central bank's monetary tightening measures, dealers said on Monday.
The rupee on Monday was trading at 67.60-68.05 (buying-selling) against the dollar in the inter-bank market after hitting a low of 70.00 at one point last Thursday.
The central State Bank of Pakistan (SBP) late Thursday slapped various monetary tightening steps to stem rising inflation.
The measures included hiking up benchmark interest rates, popularly known as three-day repo, by 150 basis points to 12 per cent from the previous 10.5 per cent.
Since then, according to dealers, the rupee is gaining strength. On Friday, the rupee recovered to 68.50 and 68.60. On Saturday, it further gained against the dollar to 67.90 and 68.00.
"The central bank measures are showing results in strengthening the rupee," forex dealer Ikhlaq Haider said.
The overall rising inflation, which at 11 per cent is already at a 30-year high, and rising import costs, due to soaring oil prices, are major factors behind the immense pressure on the SBP's fragile hard currency reserves.
According to Friday's SBP weekly report, the country's foreign exchange reserves fell further by 322 million dollars to 11.885 billion dollars.
The foreign exchange reserves had hit an all-time high of 16.486 billion dollars on October 31, but have been falling since due to import pressures and outflows by foreign investors from the stock market over political uncertainty after embattled President Pervez Musharraf imposed emergency rule on November 3.
But the situation was expected to improve a bit as Pakistan expected to receive 3 billion dollars by fiscal year end on June 30, said Finance Minister Naveed Qamar on Monday, adding that the inflow would help easing pressure on the rupee.
He did not give a break up but according to market sources around 1 billion is expected from the World Bank and Asian Development Bank and the rest from International Monetary Fund, Saudi Arabia and China.
Meanwhile, the rupee continued to show a steady to weak trend on the unofficial open market where it was trading 68.70/69.20 against the dollar.