The Pakistani Rupee (PKR) is expected to sustain its recent upward trend against the US dollar on September 18, 2023. This positive trajectory is attributed to several factors, including an increase in export earnings, a surge in remittances, and effective government measures to curb speculative activity.
Market Analysts Suggest that the Pakistani Rupee (PKR) is poised to sustain its recent upward trend against the US dollar during the next week starting from September 18, 2023.
This positive trajectory is attributed to several factors, including:
- An increase in export earnings
- A surge in remittances
- Effective government measures to curb speculative activity, which has diminished the demand for dollars in the parallel or unofficial market
A graph showing the recent upward trend of the Pakistani Rupee against the US dollar
Key Factors Contributing to the Strengthening of the Pakistani Rupee
Increased Export Earnings
Exporters are selling in both the spot and forward markets with substantial volumes, which has improved liquidity in the foreign exchange market and contributed to the strengthening of the rupee.
Surge in Remittances
The uptick in daily remittances has also contributed to the strengthening of the rupee, and this trend is expected to continue gradually.
Government Measures to Curb Speculative Activity
The regulatory measures implemented to combat illegal activities in the foreign exchange market have started yielding results. This has resulted in a reduction of the gap between the interbank and open market exchange rates, leading to an improvement in remittances.
Improvement in Current Account Deficit
Pakistan’s current account deficit, which measures the gap between foreign exchange inflows and outflows, decreased by a significant 79 percent month-on-month to $160 million in August. This improvement was seen across all four components: trade, services, primary income, and secondary income.
Challenges Facing the Pakistani Rupee
Removal of Import Restrictions
The removal of import restrictions has increased the demand for foreign currency, which has put some pressure on the rupee.
Slow Reversal in Commodity Prices
The reversal in commodity prices has been slower than desired, which could lead to higher import volumes.
Porous Border with Afghanistan
The porous border with Afghanistan allows for ongoing illicit activities, which could also lead to higher import volumes.
Outlook for the Dollar Rate Next Week
Despite these challenges, market analysts expect the dollar rate to sustain its upward trend against the Pakistani rupee next week. Exchange rates may not fall below 285 PKR per dollar (levels observed at the end of July) and are expected to consolidate in the range of 290-295 PKR per dollar.
Conclusion
The Pakistani rupee is expected to sustain its recent upward trend against the US dollar next week, driven by increased export earnings, a surge in remittances, and effective government measures to curb speculative activity. However, the removal of import restrictions, the slow reversal in commodity prices, and the porous border with Afghanistan could put some pressure on the rupee. Exchange rates may not fall below 285 PKR per dollar and are expected to consolidate in the range of 290-295 PKR per dollar.
FAQs about the dollar rate in Pakistan on September 18, 2023
What is the expected dollar rate in Pakistan on September 18, 2023?
A: Market analysts expect the dollar rate to sustain its upward trend against the Pakistani rupee on September 18, 2023. Exchange rates may not fall below 285 PKR per dollar (levels observed at the end of July) and are expected to consolidate in the range of 290-295 PKR per dollar.
Q: What factors are contributing to the strengthening of the Pakistani rupee?
A: The strengthening of the Pakistani rupee is attributed to several factors, including:
- An increase in export earnings
- A surge in remittances
- Effective government measures to curb speculative activity, which has diminished the demand for dollars in the parallel or unofficial market
- Improvement in current account deficit
Q: What challenges is the Pakistani rupee facing?
A: The Pakistani rupee is facing some challenges, including:
- Removal of import restrictions
- The slow reversal in commodity prices
- The porous border with Afghanistan
Q: What can I do to protect myself from fluctuations in the dollar rate?
A: There are a few things you can do to protect yourself from fluctuations in the dollar rate:
- Avoid taking on unnecessary debt in foreign currency
- If you have debt in foreign currency, consider hedging your risk with currency exchange contracts
- Diversify your portfolio by investing in assets that are not denominated in US dollars
- Monitor the dollar rate regularly and make adjustments to your financial plan as needed