Karachi, September 26, 2023 – In an unprecedented winning streak, the Pakistani Rupee (PKR) has made a remarkable gain of 5.6 percent against the US dollar, marking a significant shift in its exchange rate.
On Tuesday, the PKR ended at PKR 289.80 against the dollar, compared to the previous day’s closing rate of PKR 290.86 in the interbank foreign exchange market.
READ MORE: Pakistani Rupee Continues Winning Streak, Ending at PKR 290.86 Against Dollar
This remarkable turnaround comes after the PKR reached an all-time low of PKR 307.10 against the US dollar on September 5, 2023. Since then, the Rupee has demonstrated remarkable resilience, gaining 5.63 percent or PKR 17.30 over the course of fifteen consecutive trading sessions.
Currency dealers attribute the strengthening of the Rupee to the Pakistani government’s robust crackdown on illegal dollar transactions, currency hoarding, and black market activities. These measures have increased liquidity in the foreign exchange market, with exporters actively selling dollars, and daily remittances have been on the rise.
READ MORE: PKR Poised to Maintain Upward Trajectory Against Dollar Starting September 25
The State Bank of Pakistan has also taken steps to incentivize remittances through legal channels, further contributing to the positive sentiment surrounding the Rupee. Additionally, the central bank’s foreign exchange reserves have seen a slight increase, rising by $56 million to reach $7.7 billion during the week ending September 15.
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.
READ MORE: PKR Extends Winning Streak Against Dollar for 12th Consecutive Session
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.
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.
READ MORE: Pakistani Rupee Surges 4.3% Against Dollar in 11 Consecutive Sessions
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.
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.
