The Pakistani rupee hit over a 13-month high at Rs156.99 against the US dollar in the inter-bank market on Monday, as flow of foreign currencies remained high compared to outflows.
The inflows have kept the country’s foreign currency reserves stable at over a year high of $13 billion and strengthened country’s capacity to make international payments mainly on import and foreign debt repayment counters.
With a fresh gain of Rs0.14 on Monday, the currency has recovered almost 7% or Rs11.44 during the last seven months to date since it touched an all-time low of Rs168.43 on August 26, 2020.
Cause of stability: For the 9th consecutive month, workers’ remittances remained above $2 billion in February 2021 while the workers’ remittances amounted to $2.266 billion in February 2021, around the same level as the previous month and 24.2 percent higher than in February 2020.
During Jul-Feb FY21, workers’ remittances reached $18.7 billion, 24.1 percent higher than the corresponding period last year. A large part of workers ‘remittance inflow during Jul-Feb FY21 was sourced from Saudi Arabia ($5.0 billion), United Arab Emirates ($3.9 billion), United Kingdom ($2.5 billion) and United States ($1.6 billion).
Policy measures undertaken by the Government and SBP to encourage inflows through formal channels, limited cross border travel due to COVID-19, medical expenses and altruistic transfers to Pakistan amidst the pandemic, and orderly exchange market conditions contributed to this sustained rise in workers’ remittances.
Rise in apparel exports: The rupee also maintained an uptrend on the reports that Pakistan’s clothing exports grew 12% to the USA in January compared to other top nine apparel exporters to the USA whose exports dropped in the month, a market talk suggested.