Weekly Currency Report: Expected Rupee Stability At 240 To The Dollar.

Owing to an improvement in dollar inflows from exporters and remitters and some ease in the political uncertainty the country had been surrounded by, traders are hopeful that the rupee is likely to retain its current level of 240 against the greenback in the coming week.

On Friday, the battered rupee gained 57 paisa or 0.24% to close at 239.37 after a two-week losing streak against the dollar, taking its fall for 2022 to 35%. It has depreciated around 5% this week.

Foreign exchange reserves held by the State Bank of Pakistan have fallen by $7.811 billion since February to $8.575 billion in July, enough to pay around six weeks of imports.

'We see the rupee to stabilize at 240 levels in sessions ahead if there is a match between the inflows and the outflows. The rupee may draw support from remittances and export proceeds,' said a foreign exchange trader.

In the last four months, the local unit has depreciated by about 60 rupees. The rupee has emerged to become the worst performing currency along with the Turkish Lira and Sri Lankan rupee.

Having a grip on the currency is important otherwise the balance of payments crises may spill over uncontrollably into other aspects of the economy, including closure of manufacturing units, runaway inflation and law and order situation, said Tresmark in a research note.

'This week, our view is that the worst of the currency movement is behind us. We also believe that the IMF approval will go through in the next two weeks (before August 24 indicated), but if we do not receive some verbal reassurance in the coming...