The Pakistani rupee strengthened to hit a five-month high against the US dollar and the UAE dirham after the higher flow of foreign funds and positive macroeconomic news from the South Asian country. It’s good for the country but not form overseas Pakistanis as they will get a lesser exchange rate when they remit the money to the homeland.
The Pakistani rupee rose to 154.7 on Sunday, witnessing a gain of 5.2 per cent since June 2019 when the rupee was trading at 163.4, its lowest level ever. Similarly, the rupee has gained nearly 5.1 per cent versus dirham since June, as it strengthened from 44.5 on June 30 to 42.1 on the weekend.
The Pakistani rupee was trading at its highest against the greenback since June 14, 2019, said Samiullah Tariq, director of research at Karachi-based Arif Habib Limited.
“Rupee closed at 155.07/US dollar in the interbank market, appreciating by 3.1 per cent. The bid for dollar closed at 154.87, breaching the psychological level of PKR155 and surged to five-month high,” Tariq said in a research note on Sunday.
The rupee was trading at 41.9 versus dirham and 154.65 versus the greenback in the open market on Sunday.
The Asian currency is projected to strengthen further in the coming weeks due to more foreign funds inflow as well as positive news on the macroeconomic front, helping rupee to make further gains. Market sources estimate that the rupee could strengthen to 154.5 in the coming weeks.
Last week, Moody’s Investors Service upgraded Pakistan’s outlook from negative to stable due to stability in economic indicators owing to expectations that the balance of payments dynamics will continue to improve, supported by policy adjustments and currency flexibility that will reduce external vulnerability risks.
Similarly, Asian Development Bank also approved $1 billion emergency loan as budgetary support and $250 million from property tycoon Malik Riaz reached national exchequer recently from the United Kingdom.