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Hold or remit? Pakistani rupee hits a one-year high

Dubai - Higher foreign remittances and exports receipts support the south Asian currency, experts say

Pakistani rupee rose to a year high on Tuesday on the back of higher inflow of foreign currencies.

The rupee strengthened to 156.7 versus the US dollar (42.68 against the UAE dirham) on Tuesday, hitting the same level as March 15, 2020.

The strengthening of the south Asian currency is attributed to strong flows of remittances as well as improved export receipts, helping the foreign currency reserves to stay stable at $20.2 billion (b).

In February, workers’ remittances remained above $2b for the ninth consecutive month. Workers’ remittances amounted to $2.266b in February 2021, around the same level as the previous month and 24.2 per cent higher than in February 2020, the State Bank of Pakistan said.

During July 2020 to February, workers’ remittances reached $18.7b, 24.1 per cent higher than the corresponding period last year.

Currency analysts say that flow of foreign currencies has improved post-Covid-19 pandemic.

The central bank’s initiative of Roshan Digital Account (RDA) has seen deposits reaching $671 million (m) from over 100 countries. It is estimated that the inflows through RDA are expected to hit $1.5b by the end of this year.

Rajiv Raipancholia, chief executive officer (CEO) of Orient Exchange, had said that the State Bank of Pakistan is attracting foreign investments into the country, which is supporting the Pakistani rupee against the US dollar.

-waheedabbas@khaleejtimes.com