After last week’s spectacular recovery of Pakistani Rupee from above Rs. 160 to Rs. 159 per Dollar, this week has once again seen PKR’s exchange rate to shoot up above Rs. 160.
Pakistani Rupee lost 64 paisas against the US Dollar in the interbank market today, closing at Rs. 160.46, as compared to Rs. 159.81 on Tuesday.
Before this, PKR had lost 39 paisas on Tuesday after posting a negligible gain of 4 paisas on the opening day of the week.
While this week’s PKR movement has dented its recovery, this change has not come as a surprise to analysts who predicted such trends in PKR’s exchange rate to the Dollar.
“There were some importers buying dollars to meet their payment obligations, which puts pressure on the rupee,” a foreign exchange dealer earlier in the week stated.
Experts expect the rupee to likely stay range-bound in the coming days. “The trading range for the local currency for this month should be 159-161,” added a dealer.
The market analysts mentioned several potential contributing factors for this range of exchange rate. For starters, the currency moves are likely to be affected by the second wave of the coronavirus pandemic. The virus surge and its impact on exports, remittances, and demand will determine the future course of the exchange rate. The rupee may face downside pressure if the macroeconomic fundamentals deteriorate owing to the spread of the outbreak.
Other factors, such as fiscal reforms, uninterrupted flow of liquidity, may also contribute to the volatility of PKR against USD. IMF and FATF can also impact the exchange rate movement.
PKR also fell against other major currencies today, with Rs. 1.88 lost against the Euro and 35 paisas lost against the GBP.
However, concerning the US Dollar, there is hope that inflows such as remittances and enthusiastic response in Roshan Digital Account and Naya Pakistan Certificates will play a vital role in stabilizing the exchange rate.