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Time to remit: Pakistan rupee hits 3-month high, set to rise further

Dubai - In addition to strong inflows of foreign funds and remittances, good progress made on the Financial Action Task Force also supported the rupee.

Pakistani rupee hit a three-month high against the UAE dirham on Monday and is likely to strengthen further in the coming days, as dollar inflows into the country stay strong, thanks to remittances from Pakistani expatriates and foreign fund inflows.

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The rupee strengthened to 43.02 versus the dirham on Monday, its highest level since November 17, 2020 when it hit 43.04.

In addition to strong inflows of foreign funds and remittances, good progress made on the Financial Action Task Force (FATF) also supported the rupee. Under the FATF, though Pakistan had been retained in the grey list till June, it made good progress, achieving a compliance level of 24 targets out of a 27-point action plan.

Rajiv Raipancholia, CEO of Orient Exchange, said State Bank of Pakistan is attracting foreign investment into the country which is supporting the local currency against the greenback.

“Besides action to boost foreign direct investment, State Bank has implemented changes in its regulations to also facilitate portfolio investments in mutual funds, exchange-traded funds (ETFs) and real Estate investment trusts (Reits) through the rupee-based Roshan digital account (RDA).

"These changes will attract foreign investment and facilitate non-resident Pakistanis to invest funds in their country. Based on this analysis, Pakistan rupee can appreciate to 155 against US dollar (42.21 against dirham) from the present 158 versus dollar (43.10 against dirham) in the coming months,” added Raipancholia.

Pakistan received $2 billion-plus remittances from its overseas diaspora for the 8th consecutive month in January 2021, taking the total to $16.5 billion during July-January 2021 period, an increase of 24 per cent over the same period last year.

waheedabbas@khaleejtimes.com