Rupee snaps 13-day winning streak against dollar

• Rupee closes at Rs217.88 against US dollar.
• Drop in inflows changed sentiment in interbank makret.
• Analyst says next direction could be news driven — good or bad.

KARACHI: Pakistan’s currency depreciated 0.04 % (or Rs0.10) to Rs217.88 against the US dollar in the interbank market on Wednesday, ending its appreciation streak that continued for 13 consecutive working days.

The local currency had closed near a one-and-a-half-month high at Rs217.79 on Tuesday, according to the central bank.

It regained a cumulative 10.01% (or Rs21.92) in the past 13 successive working days till Tuesday, dropping close to the all-time low of Rs239.94 last month.

The currency on Wednesday recorded its first depreciation in the past two weeks after worker remittances slowed down 12.3% year-on-year to $2.4 billion and export earnings in September.

The drop in inflows changed sentiment in the interbank market and encouraged importers to buy dollars at the prevailing rate before it became expensive.

Earlier, the rupee emerged as the best-performing currency in the world last week after it notched up one of the largest gains of 3.9% in the week ended October 7 compared to all other currencies on the Bloomberg terminal.

The excessive supply of dollars in the market helped the rupee to stage a 13-day-long rally. However, the supply of foreign currency decelerated after the sluggish data on worker remittances.

Economic analyst Ali Khizar noted that the appreciation trend of the local unit is “arrested” as it closed within a range of 217.8-218 in the last three working days.

“In this week, the inflows in the form of exporters selling in forward and incremental remittances have declined significantly,” he wrote on Twitter, adding that the next direction could be news driven — good or bad.