The rupee strengthened against the dollar at Rs159.81 in the inter-bank market on Wednesday compared with Tuesday’s close of Rs159.97,
The Pakistani rupee climbed to six-month high on Tuesday and closed below 160 against the US dollar for the first time since May 8, 2020 as the economic indicators showed positive trends.
The Asian currency has recovered 5.03 per cent of its value from August’s low of 168.43 versus the US dollar.
The rupee ended last week at 160.25 against the previous week close of 161.36, gaining 0.689 per cent last week.
The surge in rupee’s value is attributed to increase in shift of remittances flow from informal to formal channels after Islamabad clamped down on illegal money transfer channels. Pakistan recorded an all-time high $23.12 billion remittances during the financial year 2019-20, an increase of 6.4 per cent. Pakistan remittances would grow at about nine per cent, totaling about $24 billion in 2020, World Bank said in its latest report.
It said there was a sharp increase in remittances since Covid-19, mostly from the GCC countries, particularly from Saudi Arabia. Arguably this spike in remittances could be at least partially attributed to the ‘Haj effect’ where Pakistani migrants remitting home the money saved for pilgrimage to Makkah due to a sharp reduction in the number of Haj visas to contain the pandemic.