On Monday, the Pakistani rupee became the third best-performing currency of Asia by reaching an almost eight-month high at Rs 158.9 against the US dollar.
The rupee closed at 159.09 in the previous session in the inter-bank market. It gained 30 paisas to settle at 158.8 against the dollar in the open market and was also up Rs 10.2 or 5% from a low of 169. According to analysts, the rupee entered the list of the best-performing currencies in Asia, appreciating by 3.1% against the US dollar since October 1.
Pakistani rupee secured the third best-performing currency position in Asia after the Indonesian rupiah and South Korean won. The Indonesian currency increases by 4.5% while the won was up 3.6%.
Rupee value strengthened due to 3 major factors, rise in foreign exchange reserves, robust remittances, improvement in the balance of payments position, and pick up in inflows from the overseas Pakistanis.
As per the statement of currency dealer, “There were routine [import] payments, while sale of forward dollars by exporters increased in the last few days,” Dealers also said the central bank is not intervening to prevent a persistent appreciation in the exchange rate.
Another dealer’s statement says that many dealers expect the Pakistani rupee rally to continue in days ahead. “We anticipate the rupee to trade around 157-level against the dollar over the next couple of trading sessions.”
Khurram Shehzad, an analyst in a tweet said, “Exports should not be hurt in the short run as the country’s export capacity, as per reports, is already operating at 100-120%, while real effective exchange rate index (measuring competitiveness through relative currency parity) also has room for further improvement in PKR/USD parity.”
He further tweeted, “So, improving currency parity should result in the country’s improved ability in servicing its external debt as well as taming imported inflation that affects masses.”