Dubai: Pakistan rupee has shown signs of recovery on Sunday at it hit the highest level against dollar during the last five months.
As of Sunday, exchange rate of Dh1 has reduced to Dh42.14 compared to Dh44.58 on June 30 indicating that the rupee is getting stronger.
The rupee in open market rose to its five-month high as demand for the greenback fell owing to the decline in imports whereas the increase in dollar from lending agencies and foreign investment in the government papers helped stabilise rupee-dollar parity, Dawn news reported.
Currency dealers foresee rupee to rise further in coming months in the wake of higher inflows of dollars and increased attraction of local currency.
Rupee gains against dollar
The dollar traded as low as Rs154.70 in the open market on Saturday which was much lower compared to Rs164 on June 26 this year.
“We traded dollar at Rs154.70 as lowest and Rs155 as the highest rate during the day. These were lowest prices since it touched Rs164,” said Forex Association of Pakistan President Malik Bostan.
The dollar scaled new peak on June 26 after it hit Rs164 mark in the open market but soon started falling against the rupee. The rupee has appreciated by 5.67 per cent against the dollar since June this year.
The stability can be attributed to steady exchange rates in the inter-bank market which showed the dollar price at Rs155 on lower side and Rs155.10 on higher side on Friday.
“One of the biggest reasons is that the country has come out from huge current account deficit of $20 billion in fiscal year 2018 and now[in] October, [it] posted a surplus for the first time after four years,” explained Bostan.
He said both risk and attraction for dollar investment has gone. Now those holding dollars are liquidating them to get rupee and benefit from the much higher returns on the local currency deposits. Due to high policy interest rate of 13.25pc, the local currency investors could get double-digit returns on long-term deposits.