Dollar continue to slide as Pak Rupee strengthens
Web Desk -- The US dollar continues to slide down against Pakistani rupee as it has lost 4.2 per cent since August reflecting improvement in external indicators.
Dollar was traded at Rs161.37 losing 45 paisa after depreciating throughout the week.
Bankers dealing with the currency markets predicted that the dollar may further fall in the coming weeks.
Cumulatively, the dollar has lost over Rs7, or 4.2pc, from Rs168.43 in August.
Currency experts in banks and open market say the Pakistani currency has gained due to improved data of external account which increased the foreign exchange reserves of the country while the dollar's demand was also down.
On the other hand they said the Financial Action Task Force’s decision to keep Pakistan on its ‘grey list’ for next four months may put some pressure on the local currency.
Forex Association of Pakistan President Malik Bostan said,“The dollar is coming down against the rupee due to several reasons including the improved external indicators like current account surplus and lower outflow from the country." He believes that the US dollar may further decline up to Rs160 in the coming weeks.
Currency dealers also identified that low public demand for US dollar in the open market caused a depreciation of dollar.
“The remittances have supported the exchange rate parity while the first quarter current account surplus provided a psychological support to the local currency against the greenback,” said Exhange Companies Association of Pakistan’s former general secretary Zafar Paracha.
However, some exporters found the rupee’s appreciation eat into their profits as the export proceeds in terms of rupees are declining.
“The falling dollar price is helpful for the country but the exporters would suffer as their export proceeds would decline but it is too early to believe that the current exchange rate is sustainable,” said Aamir Aziz, an exporters of textile made-ups to Europe.
He said the exports would continue to improve as the government has been providing a number of incentives including cheaper money to boost exports; export would help to increase the reserves of the country, he said.
The foreign exchange reserves of the State Bank of Pakistan (SBP) are over $12 billion reflecting a relatively improved condition for the stabilisation of exchange rate, he said.
SBP reserves rise to $12.066bn
Foreign exchange reserves of the SBP increased by $268 million due to foreign inflows during the week ended on October 16, reported SBP on Thursday.
The reserves of the State Bank rose to $12.066 billion. Meanwhile, the reserves of the commercial banks also increased to $7.235bn during the same week.
Resultantly, the country’s total reserves increased to $19.301bn.