Pakistani rupee soon to hit the highest level against the US dollar since June this year
Pakistani rupee getting strong, soon to hit 150 against the dollar.
Increase in the supply of dollars in the market plays a vital role in the recovery of the rupee.
The foreign investment of over $1.2 billion has also improved dollar supply and helped strengthen the rupee.
Over the next couple of months, Pakistani rupee is expected to sustain its uptrend and reach up to 150 against the US dollar. The improvement will result in building the country’s foreign currency reserves by captivating surplus banknote in the market.
A textile exporter claimed that by the end of March 2020, Pakistani rupee would reach up to around 150 to the US dollar. Around the fourth quarter (April-June) of the present economic year, the rupee will likely return to its decline phase.
“The rupee may return to 164-165 by the end of FY20,” the economist said on condition of anonymity.
SBP Monthly Report
According to SBP, so far, the rupee has reacquired 5.52% of its value. However, Rs9.07 in around the past six months to 154.98 to the banknote.
“The recovery of the rupee came following a significant increase in the supply of dollars in the market and drop in demand amid a notable reduction in imports, improvement in exports and steady inflow of worker remittances,” stated by The Economist.
Growth of dollar from the trade market by SBP played an important role in the growth of Pakistani rupee.
Since July, a foreign asset of over $1.2 billion in the government sovereign papers, mostly Treasury bills, the regular return of foreign investors to the supply market and enhancement in foreign direct investment (FDI) in oil and gas exploration, power and agriculture also enhanced dollar supply and in turn strengthen the rupee.
To recall, the central bank made a key change to the rupee-dollar exchange rate regime in May.
Previously, different governments from December 2017 to June 2019 let the rupee depreciate a massive 55.5% to an all-time low.
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