The Pakistani Rupee (PKR) strengthened against the US Dollar on Friday, gaining 13 paisas, buoyed by improved inflows of remittances and reduced demand for import payments. The rupee closed at PKR 156.83 to the dollar, compared to the previous day’s closing rate of PKR 156.96 in the interbank foreign exchange market.
The interbank foreign exchange market opened with the rupee trading in a narrow range between PKR 156.80 and PKR 156.90. The market recorded an intraday high of PKR 156.98 and a low of PKR 156.80, reflecting a relatively stable trading session. This modest appreciation of the rupee indicates a balanced demand and supply of the dollar in the market, supported by consistent inflows of remittances from Pakistanis working abroad.
Market analysts attributed the rupee’s gain to several factors. Firstly, the inflows of remittances have seen an uptick as overseas Pakistanis send money back home, providing crucial support to the local currency. The improved sentiment towards the rupee is also partially driven by lower demand for dollars to settle import payments, easing pressure on the foreign exchange reserves. Additionally, the State Bank of Pakistan’s recent measures to regulate the foreign exchange market and curb speculation have fostered a more stable currency environment.
Meanwhile, the open market exchange rate remained unchanged, with the buying and selling of the US dollar recorded at PKR 155.70 and PKR 156.70, respectively, the same as the previous day’s closing rates. The stability in the open market reflects a balanced supply and demand situation for the greenback among exchange companies and individuals.
The overall positive movement of the rupee against the dollar is seen as a reflection of improved market sentiments and a stable economic outlook. However, currency traders cautioned that the rupee’s strength might be short-lived if there is a significant rise in import payments or a decline in remittance inflows.
Looking forward, market participants are closely monitoring global economic developments and their impact on Pakistan’s trade and financial flows. The rupee’s trajectory will likely depend on the country’s ability to manage its external accounts and maintain a steady flow of foreign exchange through exports, remittances, and foreign investments.
The State Bank of Pakistan is expected to continue its vigilant stance on the currency market to ensure that any volatility is swiftly addressed, aiming to maintain confidence in the rupee amidst a challenging global economic environment.
