KARACHI: The Pakistani Rupee exhibited strength against the US dollar on Friday, appreciating by 58 paisas in the interbank foreign exchange market.
The improved sentiment in the financial sector contributed to this gain, reflecting optimism among investors and traders.
By the end of the trading session, the rupee closed at Rs154.59 per dollar, marking an improvement from the previous day’s closing rate of Rs155.01 per dollar. The currency’s upward movement was largely attributed to positive economic developments and inflows of financial assistance.
Market analysts stated that the rupee’s rise was influenced by recent approvals of foreign financial aid for Pakistan. The World Bank announced a significant funding package of $600 million, which bolstered confidence in the local currency. Furthermore, on March 24, 2021, the International Monetary Fund (IMF) sanctioned a $500 million installment for Pakistan under the Extended Fund Facility (EFF) loan program. These developments have strengthened the rupee by ensuring liquidity and supporting Pakistan’s foreign exchange reserves.
Currency dealers noted that the forex market remained buoyant as the rupee continued to gain traction against the dollar. The injection of external funds eased concerns over economic stability and foreign exchange reserves, allowing the rupee to sustain its positive trend.
Meanwhile, importers exercised caution in placing fresh import orders, given the uncertainty surrounding the pandemic situation. The resurgence of coronavirus cases in the country, particularly the onset of the third wave, has raised concerns over potential economic disruptions. Many importers anticipate that the government might implement stringent measures, including strict lockdowns, which could affect trade and economic activity.
Despite the rupee’s recent gains against the dollar, market experts caution that the exchange rate remains sensitive to global economic trends and domestic policy decisions. The demand for the dollar in the local market could fluctuate in response to trade requirements and remittance inflows. However, with continuous foreign assistance and prudent economic policies, the rupee stands a chance to sustain its stability against the dollar in the coming weeks.