The Pakistani currency made a surprising recovery on Tuesday, reaching a two-and-a-half-week high at Rs283.90 against the US dollar, a rise of 0.29%, or Rs0.81, in the interbank market. This is good news for the country as it follows a period of deficits in the balance of current account, with experts now predicting a surplus for March or April.
The recovery has been attributed to inflows from workers’ remittances and export earnings, which have surpassed import payments. Market analysts suggest that the demand for US dollars has dropped as a result of Pakistan’s efforts to control imports through administrative measures due to critically low foreign exchange reserves. The reserves currently stand at $4.03 billion, putting the country at risk of default on foreign debt repayments.
The recovery is surprising considering that the IMF programme has been delayed, with the Fund requesting Pakistan to secure more financial commitments from friendly countries.
Published in The Express Tribune, April 19th, 2023.
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