Pakistani rupee shows steady signs of recovery as US dollar drops and Pakistani rupee hits it’s highest value in the last 6 months being traded at Rs. 154.95 against US dollar at the interbank market today. Back in June, rupee was being traded at 164.05 against US dollar.
Malik Bostan, the president of the Forex Association of Pakistan said:
We traded dollar at Rs154.70 as lowest and Rs155 as the highest rate during the day. These were lowest prices since it touched Rs164,
One of the biggest reasons is that the country has come out from huge current account deficit of $20 billion in fiscal year 2018 and now[in] October, [it] posted a surplus for the first time after four years,
Pakistan rupee hit an all time low in June this year when it was traded at 164.05 against US dollar but it soon started recovering and Pakistani rupee appreciated by 5.67 percent against the dollar.
According to experts, the rise in remittances increased the inflow of US dollars while demand for dollar dropped locally leading to the price of dollar to drop. According to experts, rupee is likely to rise higher in the coming days and dollar will depreciate further.
As a result of the dollar falling against the rupee, the foreign debt owed to Pakistan has also dropped by $976 billion.
Experts and Economists say that dollar will continue to gradually fall as a result of fall in demand by investors and the public in general. The rise in dollar previously attracted these people to invest in dollar more resulting in prices for dollar going much higher.
The Asian Development Bank on Friday also approved $1.3 billion of policy based loans to Pakistan. $1 billion for supporting the budget to help the economy and $300 million for the energy sector.
The Moody Investor Service has also changed Pakistan’s debt rating status from negative to stable as a result of a stabilizing economy and the current policies being put in place.
They made a statement saying:
The change in outlook to stable is driven by Moody’s expectations that the balance of payments dynamics will continue to improve, supported by policy adjustments and currency flexibility.