Moaaz Manzoor

The Pakistani rupee remained broadly stable during the second trading week of January, posting only marginal movements against major global currencies as easing bond yields, steady foreign exchange reserves, and subdued dollar demand kept the market largely range-bound. According to data released by the State Bank of Pakistan, the rupee opened the week on Monday, January 12, at 279.7449 (buying) and 280.1700 (selling) against the US dollar.

It strengthened slightly on Tuesday to 279.7337 and 280.1588, before edging marginally firmer mid-week to 279.6949 and 280.1200 on Wednesday. The local currency remained largely unchanged on Thursday at 279.6916 and 280.1167, and closed the week on Friday, January 16, at 279.6862 and 280.1113, marking a modest 0.03% week-on-week appreciation. In the euro market, the rupee opened at 326.2501 (buying) and 326.7437 (selling) on Monday.

It traded near similar levels on Tuesday at 326.1672 and 326.6606, before easing mid-week slightly to 325.7146 and 326.2031 on Wednesday. The single currency softened further on Thursday to 325.4007 and 325.8933, and closed the week at 324.7551 and 325.2549, reflecting contained volatility. The British pound showed comparatively firmer levels early in the week. It opened at 375.6637 and 376.2429 on Monday, strengthened to 376.7826 and 377.3607 on Tuesday, before moderating mid-week to 375.8893 and 376.4677.

The pound eased further toward the end of the week, closing at 374.4307 and 375.0109 on Friday. The Chinese yuan traded within a narrow band throughout the week. It opened at 40.1354 (buying) and 40.1872 (selling), moved marginally to 40.1303 and 40.1820 on Tuesday, and hovered around 40.1282 and 40.1797 mid-week. By Friday, the yuan stood at 40.1732 and 40.2246, indicating limited movement.

Similarly, the Saudi riyal remained stable, fluctuating within a tight range from 74.5931 and 74.7013 at the start of the week to 74.5769 and 74.6862 by Friday. The Japanese yen also recorded only minor changes, opening at 1.7708 and 1.7735 on Monday, easing slightly mid-week, and closing the week at 1.7666 and 1.7692.

Brokerage houses attributed the rupee’s steady performance to improving financial conditions and supportive liquidity. Arif Habib Limited noted that SBP-held foreign exchange reserves increased by USD 16.1 million to USD 16.1 billion during the week, while the rupee appreciated 0.03% week-on-week to close at PKR 279.95 per US dollar.

The brokerage also highlighted that the government raised PKR 488 billion through a Pakistan Investment Bonds auction against a target of PKR 450 billion, with cut-off yields declining by 59 to 70 basis points across all tenors. AKD Securities also observed that SBP-held reserves rose by around USD 16 million week-on-week to USD 16.1 billion as of January 9, while the rupee strengthened 0.03% week-on-week against the greenback to close at PKR 279.95 per US dollar.

Commenting on currency dynamics, Muhammad Bilal Ejaz, Research Analyst at Ismail Iqbal Securities, told Wealth Pakistan that the rupee remained stable against the US dollar, with no immediate current account pressures visible, while a broadly steady global dollar index kept the local currency confined within a narrow trading range during the week.

Credit: INP-WealthPk