Since October, the Pakistani Rupee has continued to gain ground against the US Dollar, becoming the third best-performing currency of the Asian continent.
After a month-long depreciation against the rupee, the US dollar is being sold at 158.69 in the interbank market as of Nov 10. Only South Korean and Indonesian currencies have performed better than the PKR that has seen 3.1% appreciation over the past four weeks.
Following a deal with the International Monetary Foundation (IMF) by the Imran-led government in May 2019, the PKR had taken a nosedive against USD. It was being sold at 110 in April 2018, and by July 2020, 1USD was equivalent to PKR169. However, since Aug, the dollar has been shedding weight against the PKR and other foreign currencies.
Money dealers in the market attributed this rally of rupee against the US dollar to encouraging economic indicators as well as the global downfall of the greenback. On the other hand, importers are also being careful in buying goods from their foreign suppliers owing to the second wave of coronavirus, they claimed.
Forex Association of Pakistan President Malik Bostan quoted by a local media outlet said the dollar will likely to depreciate further amid an increase in exports. He sounded hopeful of the PKR’s appreciation against the USD, saying the strong economic outlook of Pakistan will help boost its foreign exchange reserves.
He said that Pakistan’s reliance on the dollar may also reduce — that would result in a stronger PKR, as China and Pakistan are now looking to trade in Yuan, the Chinese currency. Pakistan’s biggest import bills come from China.