Pakistan’s rupee showed strength against the US dollar for the second successive day, closing at 172.26 in the inter-bank market on Thursday.
The rupee appreciated to as much as 171.5 in intra-day trading, but ended with clipped gains. As per the State Bank of Pakistan (SBP), the rupee finished with a gain of 0.3% or 52 paisas day-on-day against the US dollar.
The respite comes after the currency posted its biggest day-on-day recovery, in absolute terms, since April 2020 on Wednesday, when it closed at 172.78.
Back-to-back gains, however, follow the rupee dropping to its lowest level on Tuesday when it closed over the 175 level for the first time in the inter-bank market.
The recovery comes after the announcement of Saudi Arabia’s $4.2-billion support package in financial assistance to Pakistan.
The Saudi Fund for Development (SFD), on Tuesday night, announced the issuance of the Royal Directive to deposit an amount worth of $3 billion into the central bank of Pakistan, “to help the Pakistani government support its foreign currency reserves and support it in facing the impacts of the coronavirus pandemic,” read a statement by the Saudi Press Agency (SPA).
Additionally, the SFD said that the royal directive was also issued to finance the oil derivatives trade with a total amount of $1.2 billion throughout the year.
Pakistan’s rupee has been under pressure since May this year as a widening current account deficit, high imports, and the volatile situation in Afghanistan taking toll on the currency.