KARACHI: The rupee strengthened against the dollar for the fifth straight trading day on Thursday as a result of a change in leadership at the Ministry of Finance and a message from Ishaq Dar to the local currency speculators.
The dollar’s value in the interbank market dropped during intraday trade from the previous session’s finish of 232.12 to 229 per rupee. The PML-N supremo Nawaz Sharif’s close aide Ishaq Dar’s reappointment as the nation’s finance minister has contributed to bettering sentiment, while the decline in global commodity prices fueled the rupee’s advance.
The first factor is a shift in market attitude brought on by a change in leadership at the federal ministry of finance, according to economist and former adviser Dr. Khaqan Hassan Najeeb.
“The new team is perceived to be more sensitive of rupee movement and so leaning toward more orderly movement,” the former adviser added. Second, he mentioned that several fundamentals had improved, particularly a fall in oil prices as well as other important commodity prices, which may assist lower the number of imports.
Fortunately, dropping global commodity prices and government administrative actions will likely keep the current account deficit under control. Dr. Najeeb added that the World Bank and the Asian Move Bank’s confirmation to give flood assistance is a market-supporting development.
The analyst continued by saying that although it seems unlikely, the possibility of the International Monetary Fund (IMF) reconsidering and relaxing some requirements due to the impact of the floods is raising the value of the rupee.
The new finance czar asserts that the value of the local unit is undervalued and that he will try to control inflation by decreasing interest rates. He has firmly supported intervention in currency markets during his three prior tenures in the position.
