KARACHI: The US dollar bounced back on Friday with an appreciation of 33 paise in the interbank market snapping the rupee’s five-day winning streak.
The rupee started gaining against the US dollar on May 27 and kept appreciating during the last five sessions. The dollar was sold as low as Rs197.59 on June 2.
However, the market felt a change in sentiment on Friday and the demand for greenbacks increased suddenly. The market’s mood shifted after the government again raised petroleum prices by Rs30 per litre in less than a week.
The dollar was traded at Rs197.92 in the interbank market compared to Rs197.59 on June 2, showing a gain of 33 paise.
Currency experts said this could be a temporary appreciation of the dollar due to oil price shocks that will increase inflation. However, the expected inflows from the International Monetary Fund (IMF) and China could once again support the local currency, they believe.
Finance Minister Miftah Ismail has expressed hope for an IMF deal and rollover of a $2.3 billion Chinese loan that would improve the foreign exchange reserves of the country.
The exchange rate has been vulnerable since March this year when the effort to change the government began, and it was changed in the second week of April. The dollar kept appreciating, but with the change of government, the dollar depreciated immediately. Within days, the dollar started gaining more against the rupee and reached a peak of Rs202.01 on May 26.
