In Karachi, the Pakistani Rupee showcased resilience on Friday, gaining 16 paisas against the US Dollar and breaking a four-day losing streak in the interbank foreign exchange market.
Closing at Rs158.98 to the dollar, the rupee demonstrated a notable improvement from its previous day’s closing rate of Rs159.14. This turnaround comes after a period of decline that commenced on Monday, with the rupee sliding from Rs154.24 to the dollar and experiencing consecutive drops until Thursday.
Currency experts attribute the strengthening of the local unit to several factors, including the influx of export receipts and workers’ remittances. These inflows inject liquidity into the market, bolstering the value of the Pakistani Rupee against the US Dollar.
Furthermore, experts note that the outflows of funds by foreign investors, which had previously exerted downward pressure on the rupee, are now showing signs of easing. This trend toward stability is attributed to a potential decline in the outflows of foreign investments in debt securities, which could further contribute to the recovery of the rupee in the days to come.
However, the currency market remains under pressure due to the global uncertainty stemming from the coronavirus threat. The recent declaration by the World Health Organization (WHO) categorizing the virus as a pandemic has exacerbated financial turmoil worldwide. Investors globally express dissatisfaction with government measures aimed at containing the spread of the virus, leading to heightened market volatility.
The turmoil extends to stock exchanges, with the Pakistan Stock Exchange (PSX) halting trading for the third time this week. This interruption reflects the challenges faced by financial markets in navigating the uncertainties surrounding the coronavirus outbreak and its impact on economic activity.
Similarly, US stocks experienced significant losses on what has been termed ‘black Thursday,’ indicating the severity of the market downturn amid mounting concerns over the pandemic’s economic ramifications.
In conclusion, the rebound of the Pakistani Rupee against the US Dollar marks a welcome respite amid challenging global economic conditions. While factors such as export receipts and remittances contribute to this improvement, ongoing uncertainties surrounding the coronavirus pandemic continue to pose significant challenges for financial markets worldwide. As stakeholders monitor developments closely, proactive measures and coordinated efforts will be essential to navigate the evolving landscape and foster stability in both currency and equity markets.
