KARACHI: The Pak Rupee eased against the dollar on Monday after maintaining a 23-day gaining streak. The rupee ended at Rs158.17 to the dollar from last Friday’s closing of Rs158.16 in the interbank foreign exchange market.
Market dealers noted that the demand for dollars was higher due to the first trading day of the week, driven by import and corporate payments. They highlighted that the rupee remained strong during the day, supported by inflows from workers’ remittances and export receipts, but higher import and corporate payment demands tempered its gains.
The rupee had been on a positive trajectory for 23 consecutive trading days. On October 12, 2020, the interbank exchange rate stood at Rs163.81, and by November 13, 2020, it had improved to Rs158.16 to the dollar.
Notably, the rupee had hit an all-time low against the dollar at Rs168.43 on August 26, 2020. Since then, it has recovered by Rs10.28, demonstrating significant resilience.
Currency dealers attributed the rupee’s recovery to improved foreign exchange reserves, a lower trade deficit, sustained inflows of workers’ remittances, and a surplus current account. These factors collectively bolstered the local currency against the US dollar.
The State Bank of Pakistan (SBP) reported that workers’ remittances remained above $2.0 billion for the fifth consecutive month in October 2020. Specifically, remittances amounted to $2.3 billion during October 2020, marking a 14.1 percent increase compared to October 2019.
For the period from July to October of FY21, workers’ remittances surged to $9.4 billion, reflecting a 26.5 percent growth over the same period last year. A significant portion of this year-on-year increase in October 2020 was sourced from Saudi Arabia (30 percent), the United States (16 percent), and the United Kingdom (14.6 percent).
The growth in remittances was also driven by improvements in Pakistan’s FX market structure and dynamics, efforts under the Pakistan Remittances Initiative (PRI) to formalize the flows, and limited cross-border travel. These elements combined to support the continued inflow of remittances, reinforcing the rupee position in the market.