Rupee extends winning run against US dollar

KARACHI: The Pakistani rupee continued to strengthen against the US dollar, gaining Rs 1.14 against the greenback on Tuesday.

At midday, the rupee was hovering at 280.49, showing an increase of Rs1.16, in the inter-bank market. By the end of trading day, PKR had extended the gains to settle at Rs 280.51 to the USD.

This is one of the longest appreciations runs seen by the rupee against the US dollar in the inter-bank market, and comes in large part due to the authorities’ crackdown on smuggling and hoarding of foreign currency as well as reforms in the Exchange Companies’ sector.

US dollar expected to drop below Rs280 next week

Pakistan’s rupee has gained 6.1% against the dollar so far in September, following an official clampdown on illegal foreign exchange trade in grey and black markets by security agencies.

September’s gains have almost made up for all of the rupee’s losses in August and technically make it the best-performing currency in the world this month. The rupee hit a record low of 307.1 against the dollar on Sept. 5 but has made a sharp recovery since the country’s financial regulator and security agencies began taking action the next day to curb black market operations.

Internationally, the US dollar softened on Tuesday along with US interest rate expectations and a fall in Treasury yields as investors detected a slight dovish shift in Federal Reserve officials’ tone.

The US dollar retreated as the 10-year Treasury yield eased to 4.63% in Asian trading hours, after hitting a 16-year high of 4.88% last week.