KARACHI – The Pakistani Rupee strengthened by 23 paisas against the US dollar on Thursday, driven by an adequate supply of the greenback to meet import and corporate demand, according to market dealers.
The Rupee closed at Rs160.32 per dollar in the interbank foreign exchange market, appreciating from the previous day’s closing rate of Rs160.55.
Sufficient Dollar Supply Supports Rupee
Currency dealers noted that the Rupee’s appreciation was largely due to the sufficient supply of the dollar in the market, which helped balance out the demand generated by import and corporate payments.
“The market witnessed a healthy supply of dollars, which eased pressure on the Rupee, leading to its appreciation,” said one dealer.
This positive movement comes at a time when the local currency has shown resilience, supported by improved economic indicators and a stable supply of foreign exchange.
Current Account Surplus Boosts Market Sentiment
Another factor contributing to the Rupee’s upward trajectory is Pakistan’s current account surplus. For the first five months of the current fiscal year, the country posted a current account surplus of $1.64 billion, a stark contrast to the $1.74 billion deficit recorded during the same period last year. This improvement has bolstered market confidence, with expectations that the Rupee will maintain its strength in the near term.
“The current account surplus has positively impacted market sentiment, providing a cushion to the Rupee,” added the dealer.
Global Concerns and COVID-19 Impact
Despite the Rupee’s recent gains, concerns remain over global economic conditions, particularly due to the discovery of a new strain of COVID-19 in the UK. This development has raised fears across global markets, with importers in Pakistan becoming cautious about placing new orders.
The new COVID-19 variant has added uncertainty to international trade, which could influence demand for foreign exchange in the future.
Optimistic Outlook for the Rupee
Currency experts remain optimistic about the Rupee’s performance in the coming days, despite the typical year-end pressures. The Rupee is expected to benefit from Pakistan’s improved economic indicators, including a stable current account position and strong remittances.
“The local unit is likely to gain further ground as economic fundamentals improve,” one expert noted, emphasizing that while challenges remain, the Rupee’s outlook is positive.