The Pakistani rupee strengthened further on Tuesday, crossing the Rs290 mark against the US dollar in the interbank market, thanks to the crackdown on the money market. This upward trend has continued since the recent crackdown on illegal dollar trading, led by the army.
As the interbank market closed, the US dollar was valued at Rs289.80, a decrease of Rs1.06 from the previous day’s closing rate of Rs290.86, according to the State Bank of Pakistan.
The rupee also made significant progress against the dollar in the open market, where it was trading at Rs292 compared to Rs293 the previous day, as reported by the Exchange Companies Association of Pakistan.
Saad Bin Naseer, director of the financial services platform Mettis Global, highlighted that today marked the 16th consecutive day of appreciation for the Pakistani rupee, representing an almost 6% increase.
Naseer mentioned that if this trend continues and the Afghan border remains closed, the rupee is likely to appreciate further in the future. However, he emphasized the importance of attracting foreign direct investment (FDI) in export-oriented sectors for long-term stability.
Nevertheless, some analysts caution that these gains may only be short-term. “The gains seem to be sustainable in the short term,” said Khurram Schehzad, the CEO of Alpha Beta Core. “However, for long-term sustainability, we need dollar inflows from remittances, exports, and foreign investments.”
By encouraging a steady influx of foreign investments into Pakistan’s export-oriented sectors and focusing on attracting remittances and exports, Pakistan can potentially achieve long-term stability for its currency. The current appreciation should be seen as an opportunity to attract more foreign direct investment and strengthen the country’s economic outlook.