Rupee continues to recover, reaches Rs165.4 against USD

KARACHI: The Pakistani Rupee registered gains on Tuesday and was traded at Rs165.4 against the dollar. This level has not been seen since 18th June 2020.

Komal Mansoor, a senior analyst at Tresmark commented, "The State Bank of Pakistan (SBP) is selling dollars in the market after getting approval from China to use the $1 billion loan given to maintain forex reserves for budgetary support."

She added that strong remittances have also supported the rupee.

"Remittances have been at a record high in the last two months, thus strengthening the rupee."

Meanwhile, Samiullah Tariq, Head of Research at Pak Kuwait Investment Company, stated, "This may be because of the lagged impact of the current account surplus."

He said the introduction of SBP Roshan Account may also have impacted the Rupee. "There is an improved sentiment due to the introduction of the Roshan Pakistan accounts."

Tariq, however, pointed out, "You cannot forget that the dollar is weak globally and that the rupee is undervalued on the basis of the Real Effective Exchange Rate (REER)."

Going forward, Mansoor believed that the rupee is likely to find support at Rs165.