During the ongoing fiscal year, The 73-paisa gain on Wednesday tossed the rupee to its highest level. In opposition with the US dollar at Rs157.12 in the interbank market.
Furthermore, Local currency till now has restored 6.8 per cent in 2020-21. Against the greenback based on higher inflows and slow demand for US dollars.
Alternatively, on Tuesday the rupee closed at Rs157.12 in the interbank market from Rs157.85. The dollar price recorded a fall of Rs2.97, or 1.8pc, during the last 30 days.
According to Atif Ahmad a currency dealer in the interbank market “Not sure how far the dollar will continue to fall but some macro indicators are in support of local currency.”
Exchange rate & Exports
The exchange rate of rupee unreliability has been a persistent problem for trade and industry, particularly for exporters and importers. However, the State Bank of Pakistan (SBP) now prolongs the exchange rate. Hence, is free of any influence and is market-based.
According to the SBP governor a number of times that the central bank has succeeded in bringing stability in the exchange rate due to a market-based mechanism.
Moreover, the Forex Association of Pakistan President Malik Bostan enlighted his views. As he said the inflows through exchange companies were also higher than last year. His expectations were that the exchange companies would deposit up to $3bn into banks. Through export proceeds (against the selling of currencies/rupee other than the US dollar in Dubai) by June 30. Last year this amount was $2.5bn.
The currency dealers in both the interbank and open markets had a keen eye on the current account. Which is still in surplus during the first seven months of FY21 at $912m. However, the current account became negative by $229m in January, a sharp contraction from the $652m deficit in December 2020.
Meanwhile, experts see no such improvision in exports in the remaining months of this fiscal year. Which could have a cynical impact on the exchange rate as well as export proceeds. Ultimately the current account could be in deficit by the end of FY21.