5 factors which strengthen belief that US Dollar will hit Rs 250 mark in coming weeks
Shares
![5 factors which strengthen belief that US Dollar will hit Rs 250 mark in coming weeks](https://timesofislamabad.com/digital_images/large/2023-10-08/5-factors-which-strengthen-belief-that-us-dollar-will-hit-rs-250-mark-in-coming-weeks-1696784586-9132.jpeg)
The rupee is on the verge of surpassing the 280 per dollar threshold in the near future, primarily driven by a combination of positive factors that have injected confidence into investors. These factors include the country's optimistic outlook for securing the next tranche from the International Monetary Fund (IMF), a notable improvement in the balance of payments, and effective measures taken to curb illicit dollar trading.
As of the close of Monday's trading session, the rupee stood at 286.76 against the dollar in the interbank market. Its ascent continued, reaching 282.69 by the end of Friday, marking a 1.4 percent gain for the week. According to financial analysts at Tresmark, a notable milestone looms as the rupee is expected to break the 280-dollar.
Several key factors are contributing to the strengthening of the rupee, including the favorable progress with the IMF, the expected boost from the forthcoming tranche, reduced smuggling due to the closure of the Afghan border (especially in gold, a primary channel for illicit wealth transfer), the anticipated surplus in the current account, and the promising outlook for remittances.
The government's efforts to curb the misuse of the Afghan Transit Trade (ATT) and the decline in oil prices are anticipated to significantly bolster the balance of payments, providing further support to the rupee. However, it is important to acknowledge that two critical risks exist in this scenario, namely political instability and the acceptance of IMF terms, both of which are currently considered manageable.
Furthermore, recent trade deficit figures for Pakistan reveal a positive trajectory. This positive trend, combined with an increase in remittances, raises the possibility of a current account surplus. Such a development could offset the current account deficits witnessed in the earlier months of July and August.