From Zeeshan Mirza
KARACHI: After falling against the dollar for three consecutive sessions, the PKR reversed the trend on Monday.
The local currency closed at Rs220.89 per dollar, up Rs1.58 or 0.72 per cent from Friday’s close of Rs222.47, according to the State Bank of Pakistan.
Saad bin Naseer, director of financial data and analytics portal Mettis Global, attributed the rupee’s gain totwo factors — Prime Minister Shehbaz Sharif’s upcoming visit to China during which he expects to enhance trade and business ties, and the Real Effective Exchange Rate (REER) index depreciating to 90.9 in September compared to 94.4 in August.
The REER is the weighted average of a country’s currency in relation to an index or basket of other major currencies. The weights are determined by comparing the relative trade balance of a country’s currency against each country within the index. This exchange rate is used to determine an individual country’s currency value relative to the other major currencies in the index. The REER is used to evaluate how a currency is fluctuating against many others at once, and is also used in international trade assessments. Head of Research at Tresmark, Komal Mansoor, also noted that the REER index had come in lower than JP Morgan’s expected figure of 108.
