The climb of the Pakistani Rupee against the US Dollar seems to have come to a halt, as for the third consecutive day, PKR declined in the exchange rate against the USD.
PKR traded above Rs. 160 against the USD for the first time since November 02, 2020.
From trading at Rs. 159.83 on November 18, PKR lost 78 paisas to trade at Rs. 160.61 to the dollar on November 19, 2020. Yesterday (November 18), PKR weakened by 1.2 percent intraday on a high/low basis trading at the highest of 158.25 and the lowest at 160.10.
The root cause for this change in PKR’s movement against the dollar is being attributed to the rise in the country’s imports. Temporary Economic Relief Facility (TERF) by the State Bank of Pakistan (SBP) is going to encourage even higher imports of machinery, which is only expected to make PKR lose against USD even more.
On the other hand, SBP’s policies of attracting foreign investment, coupled with the textile sector’s export performance is providing much-needed support to PKR and is likely to prevent a steep and rapid rise in the exchange rate.
Despite foreign exchange reserves improving consistently in the past few months, and the current account being in surplus for four months in a row, the Rupee weakened by 79 paisas to 160.62 today. From July to October 2020, the current account surplus stood at $1.2 billion and forex reserves of the central bank were at $12.93 billion.