Karachi, September 25, 2023 – The Pakistani Rupee (PKR) has continued its impressive winning streak against the US dollar for the 14th consecutive session, closing at PKR 290.86 in the interbank foreign exchange market.
This strong performance saw the local currency gaining 90 paisas, ending the day at PKR 290.86 compared to last Friday’s closing rate of PKR 291.76 in the same market. The Rupee’s recent success is a remarkable turnaround, considering that it had reached a record low of PKR 307.10 against the dollar on September 5, 2023. Since then, the Rupee has made significant gains, appreciating by PKR 16.24, which translates to a 5.29 percent gain against the US dollar.
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Currency dealers attribute the Rupee’s strengthening to the government’s crackdown on illegal dollar transactions, currency hoarding, and black market activities. These measures have boosted liquidity in the foreign exchange market, with exporters actively selling dollars and daily remittances on the rise.
The State Bank of Pakistan has also taken steps to encourage remittances through legal channels by announcing monetary incentives for banks, further bolstering confidence in the Rupee. Additionally, the central bank’s foreign exchange reserves showed a slight increase, rising by $56 million to $7.7 billion during the week ending September 15.
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Despite the challenges posed by rising global oil prices, there is optimism that inflation in Pakistan may moderate in the coming months. Factors contributing to this positive outlook include currency stability, improved foreign exchange reserves, crackdowns on smuggling, and reductions in the prices of essential commodities such as wheat and sugar.
The recent announcement by the Election Commission of Pakistan that elections are scheduled for the final week of January 2024 has alleviated concerns of a prolonged delay, resulting in increased investor confidence and a boost in positive sentiment.
READ MORE: Pakistani Rupee Surges 4.3% Against Dollar in 11 Consecutive Sessions
However, analysts caution that, despite administrative measures showing results in correcting the Rupee’s course and stabilizing the prices of essential goods, a significant reduction in the high inflation currently experienced by Pakistanis may not be imminent. Rising petrol and energy prices remain key factors contributing to inflation.
While most analysts expect the consumer price index inflation for September to remain around 30 percent, the weekly sensitive price index has seen three consecutive weeks of gains, potentially affecting the State Bank of Pakistan’s inflation projections.
READ MORE: Pakistani Rupee Achieves 10th Consecutive Gain Against Dollar, Soars to PKR 294.90
As the Rupee continues its upward trajectory, the Pakistani economy faces a complex landscape of challenges and opportunities, with both domestic and international factors influencing its course.
