The Pakistani rupee is expected to remain stable in the short term, supported by strong remittance inflows ahead of the holy month of Ramazan, according to a report published this week.
The local currency continued its gradual appreciation, rising 0.03% week-on-week against the US dollar in the interbank market. The rupee closed at Rs279.92 per dollar on Monday, up slightly from Rs279.86 on Friday.
“The rupee is now trading in uncomfortable territory below 280 per dollar,” noted Tresmark in a client update. “Near-term sentiment remains supportive, with Ramadan approaching, remittance inflows expected to stay strong, and a recent surge in portfolio investment into T-bills.”
Key Factors Supporting the Rupee
| Factor | Details |
| Remittances | Rose to $3.6 billion in December, up 17% YoY and 13% MoM |
| Fiscal Year Trend | Total remittance inflows $19.7 billion in the first six months, +11% YoY |
| Dollar Movement | USD down Rs9 against rupee in past 6 months, expected to reach Rs250 (ECAP) |
| Export Challenges | Decline due to climate change & floods, affecting agricultural output |
Malik Muhammad Bostan, Chairman of the Exchange Companies Association of Pakistan (ECAP), highlighted that over 700,000 Pakistanis went abroad last year, which could boost remittances to $45 billion, strengthening the rupee and foreign exchange reserves.
Market Outlook
Analysts predict mixed trends:
• Monetary Policy: Most expect further easing at the central bank’s upcoming meeting, though Tresmark forecasts no change due to external and domestic factors.
• Global Influences: Fed likely to pause after three consecutive 25-basis-point cuts. Rising geopolitical risks and Brent crude above $65 maintain external inflation pressures.
Summary: With robust remittances, supportive investor sentiment, and strategic monetary oversight, the Pakistani rupee is expected to remain firm in the near term, though exporters are advised to hedge against potential volatility.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers should consult a licensed financial advisor before making any investment decisions.