The major factor in the rupee appreciation is the current account surplus of $792 million recorded in the first quarter of the ongoing fiscal year. In addition to this, lower oil imports, increase in textile exports and debt suspension by G20 countries have stabilised the rupee.

Experts are of the view that rupee is likely to hit Rs 160 by December of this year, primarily because of increase in remittances and decrease in imports.

On August 26, the dollar was at an all time high of Rs168.38 but has fallen by Rs6.61 in the last two months.

Inflows through official channels have increased due to the grounding of flights over the last six months after the outbreak of Covid-19. According to Paracha, this has been a key reason behind the higher remittance numbers in the last

Intermarket Securities Head of Research Saad Ali said, “We think the lack of weakness in the external account has been a key factor (SBP reserves are over $12bn), but this is also reportedly led by the IMF suggesting to Pakistani authorities to let the currency find a fair level based on market conditions.”

The SBP on Thursday reported a $268m increase in foreign exchange reserves in the week ending on October 16 to $12.066 billion.

“The appreciation should continue in the near-term in our view. However, there are debt repayments due next year. Just recently, the G20 agreed to extend the moratorium on debt repayments for another six months. We think next year the PKR can witness volatility although the revival of the $6bn IMF programme should offer support,” he added, while sharing the outlook for the next few months.

“The rupee is showing improvement mainly due to the improvement in the balance-of-payments situation. The current account has remained in surplus in the past three months owing mainly to in-check trade balance and record-high remittances number,” said BMA Capital’s research head Faizan Ahmed.

“The country’s Real Effective Exchange Rate (REER) for the month of June 2020 also shows undervaluation of PKR. Apart from this, healthy inflows in Roshan Pakistan Digital Account are also driving optimism in the currency,” he added.

The author is a member of staff and heads the sports and business desks at The Correspondent. He mainly lives in the shadows as a ghost writer so you may have read his work and not even known it. He can be reached at


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