Pakistani Rupee gained 14 paisas to the US Dollar on the final trading day of the week, adding on to yesterday’s gain of 19 paisas. The beginning of the week saw PKR deteriorate against USD. However, PKR turned its tide on Thursday.
PKR closed at Rs. 160.13 on Friday as compared to Rs. 160.28 on Thursday, which was down from Rs. 160.48 on Wednesday. Before this, the Pakistani Rupee lost only 1 paisa against USD on Wednesday and 15 paisas on Tuesday after posting a loss of 18 paisas on the opening day of the week.
According to the data shared by the financial analytics platform Capital Stake, the Pakistani rupee remained volatile for the better part of the past two weeks. From last week’s closing (Friday, December 4) loss, PKR maintained average improvement until this week’s closing (today).
Overall, the current week saw volatility in PKR’s exchange rate to the dollar, with Monday (December 7) starting a three-day loss streak ending on Thursday and then following moderate recovery towards the end of the week.
The data by the platform also showed that PKR lost a total of 72 paisas, or 0.45 percent, against USD since the beginning of December 2020, while it posted a negligible loss, less than 1 paisa, during the current week. The exact amount of loss on Monday and Tuesday was evened out by the exact amount of gain on Thursday and Friday.
The local currency has recovered Rs. 8.31 or 4.93% against the US Dollar from its 52 week low of 168.4353 per USD, which was seen on August 26.
This movement of PKR’s exchange rate, although fluctuating, 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 to 161,” added a dealer.
However, remittances have maintained strong momentum with the value of inflows exceeding $2 billion in November for the 6th straight month of the current financial year 2020-21.
According to the State Bank of Pakistan, remittances inflows in the outgoing months reached $2.34 billion, up 2.4 percent over the previous month and 28.4 percent over November 2019.
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.
As for other major currencies, PKR also showed a steep fall followed by a steep gain against the GBP during the week. On the final trading, PKR rose strongly once again, gaining Rs. 2.23 to the GBP on Friday.
However, PKR posted a loss against the Euro, Australian Dollar, and Canadian Dollar of 20 paisas, 56 paisas, and 17 paisas, respectively. Against Saudi Riyal and UAE Dirham, PKR posted a gain of 3 paisas and 4 paisas, respectively, on the final trading day of the week.