Time to remit: Pakistani rupee likely to strengthen in coming months
Monitoring Report
DUBAI: For Pakistani expats in the UAE, it's a good time to remit money as the Pakitani rupee continues to strengthen with every passing day. This trend is likely to continue in the months ahead.
The rupee has become one of Asia’s best performing currency, appreciating 10 rupees against the US dollar in the last two-and-a-half months, thanks to increase in remittances following crackdown on hawala (illegal money transfer system) channels, increase in exports and surge in the country’s foreign exchange reserves.
The rupee was trading at 43.2 versus the UAE dirham on Wednesday, rising 5.7 per cent since August 27, when it was trading at 45.88.
Pakistan’s foreign exchange reserves have jumped from $8 billion in October 2019 to $12 billion in October 2020. Similarly, it is expected that country will record $792 million current account surplus in 2021 as compared to $1.5 billion deficit in 2020, helped by increase in exports and lower oil prices.
The Imran Khan-led Pakistan Tehreek-e-Insaaf government is also on track with its tax collection target as the Federal Board of Revenue met its target and raised Rs1.33 trillion in taxes in the first four months of FY 2021.
Analysts forecast that the rupee will continue to strengthen in the months ahead. It is projected that the rupee could gain over five per cent in the near future and touch 150 against greenback (40.9 versus dirham) in the first quarter of 2021 when Islamabad will raise around $2 billion through sukuk or euro bonds. This will further improve the country’s foreign exchange reserve and bring stability to its currency.
Malik Bostan, President of Forex Association of Pakistan, has said that most of the forecasts claim further weakening of the dollar against rupee and Pakistani currency could touch 150 if the country gets debt relief on its external loans.