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Tuesday, March 5, 2024
HomeFinance NewsPKR Surges as Money Market Tightens Grip, Below 290 to USD -...

PKR Surges as Money Market Tightens Grip, Below 290 to USD – Business Update

The Pakistani rupee has continued to rise against the US dollar, trading at less than Rs290 in the interbank market. This upward trajectory is attributed to the government’s crackdown on the illegal trade of the dollar. The rupee has also made gains in the open market, further strengthening its position. Analysts believe that these improvements are primarily due to administrative measures and address speculative elements that contribute to rupee depreciation. However, some analysts caution that the current gains may be short-term and emphasize the importance of long-term sustainability through dollar inflows from remittances, exports, and foreign investments.

The rupee’s appreciation against the dollar marks the 16th consecutive day of gains, amounting to almost a 6% increase. The government’s assessment of addressing speculative elements through crackdowns seems to be effective in stabilizing the currency. This positive trend is expected to continue if the Afghan border remains sealed, leading to further rupee appreciation. To ensure long-term stability, analysts emphasize the need for attracting foreign direct investment (FDI) into export-oriented sectors. This would diversify the sources of dollar inflows and support the sustained growth of the Pakistani rupee.

While the current gains are encouraging, some analysts express the need for a comprehensive strategy to sustain the rupee’s strength. They highlight the importance of dollar inflows from remittances, exports, and foreign investments in achieving long-term sustainability. This suggests that the government’s administrative measures must be complemented by efforts to boost economic activities that generate foreign exchange. By focusing on attracting FDI into export-oriented sectors, Pakistan can diversify its sources of dollar inflows and ensure the stability of its currency in the long run.

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