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What is happening with the Pakistani Rupee

Two weeks ago at a client presentation when someone asked an Analyst about his Rupee outlook he mentioned 90 by the end of 30th June and possibly 92-93 by the end of the year. Much as I hated it, there wasn’t any ammunition I could throw at him. At the rate the rupee slid from 82 to 86 in the last few months, if you were a pro-Rupee analyst you were outdated, outvoted, out-moded and most likely out of a job.

Then on 4th March 2010 something changed. This morning when I asked my friendly treasury guy about the Interbank rate for converting dollars to Rupee, I was told the most likely expected open on Monday morning for selling dollars is likely to be 83.90 or 83.95 and the Rupee many actually strengthen further all the way to 83.75 if the trend holds.

I am not sure what is driving this appreciation. The only thing that possibly adds up is that we expect to receive a larger than expected share of the outstanding Coalition Support Fund (CSF) payments within the next few weeks or months, or we have struck oil in our most recent offshore oil well for which results should come out in late March. On the striking oil bit, please note that all we need is one or two strikes of 40,000 barrels per day and we are done. That is all the oil we need to wipe out about 5 billion dollars worth of oil imports from our balance of trade. Will we see Rupee breaking 82 (possibly even 80) by the end of April?