The Pakistani Rupee appears poised to sustain its upward trajectory againstthe US dollar in the upcoming week, buoyed by robust export and remittanceinflows as well as growing optimism regarding the country’s economicprospects, according to a report by The News on Sunday.
Over the course of the previous five trading sessions, the local currencydemonstrated a notable increase of 1.41% against the US dollar. Commencingthe week at 295.95 per dollar in the interbank market, it concluded at astronger 291.76 on Friday, marking a significant ascent.
A currency expert remarked that while they anticipate the Rupee’s ascent topersist, they do not foresee a substantial surge in its value relative tothe dollar. The ongoing campaign against illicit dollar transactions,currency hoarding, and black market dealings seems to be yielding somepositive outcomes.
The foreign exchange market has observed increased liquidity, partlyattributed to exporters selling dollars and a rise in daily remittances.This heightened liquidity is a result of actions taken by the State Bank ofPakistan (SBP), including the introduction of monetary incentives forbanks, which have lent support to the Rupee’s sentiment.
Read Top Stories
Furthermore, the SBP’s foreign exchange reserves experienced a minoruptick, increasing by $56 million to reach $7.7 billion in the week endingSeptember 15. This development reinforces confidence in the Rupee’sstability.
In the face of rising oil prices, there is optimism that inflation mayexhibit moderation in the coming months. Several factors contribute to thisoptimistic outlook, including the Rupee’s stability, enhanced reserves,crackdowns on smuggling, and a decrease in the prices of essentialcommodities like wheat and sugar. Additionally, the recent announcement bythe Election Commission scheduling elections for the final week of January2024 has alleviated concerns of prolonged uncertainty, boosting positivesentiment among investors. In line with this, market expectations suggestthe Rupee is likely to consolidate within the 290-295 range, with apotential resurgence approaching the levels seen in July at 286 per dollar,as per Tresmark’s weekly client note on Saturday.
