KARACHI: The US dollar’s weakness against international currencies and higher inflows helped the rupee stage a recovery to a three-month peak against the greenback in the interbank market, currency dealers and experts said on Saturday.
However, market experts maintained that some macro indicators were positive in favour of the local currency to recover.
During the current fiscal year, the exchange rate witnessed large fluctuations and the rupee fell to the lowest against the dollar in August 2020 (FY21). The dollar reached Rs168.70 on Aug 20 last year.
Since then the rupee recovered and during the last three months it gained 1.4 per cent against the US dollar. The rupee was as high as 161.13 on Jan 16 this year; it gained Rs2.32 per dollar or 1.4pc. The dollar was traded at Rs158.81 on Friday, Feb 12, in the inter-bank market which was a three-month low. The dollar was traded at Rs158.31 on Nov 15, 2020.
“The rupee fell more against the UK pound compared to the US dollar since the beginning of the new calendar year 2021 reflecting the dollar’s weakness,” said Malik Bostan, president of the Forex Association of Pakistan.
“The foreign inflows have also increased like remittances during the current fiscal year while the government has succeeded in dealing with the World Bank and the Asian Development Bank for several billion dollars. It helped the local currency to get strengthened against the US dollar,” he added.
The Asian Development Bank (ADB) on Jan 28 announced a new five-year loan programme, estimated at approximately $10 billion, for Pakistan to help in expanding economic opportunities in the country.
On July 1, the World Bank approved $500m in budgetary support for Pakistan. On Dec 8, the World Bank’s Board of Executive Directors approved $300m in financing for two projects in Pakistan — the Sindh Resilience Project and the Solid Waste Emergency & Efficiency Project.
Published in Dawn, February 14th, 2021