Rupee likely to remain stable next week

KARACHI: The rupee is expected to maintain the current levels against the dollar next week, owing to foreign inflows and planned incentives to remittances.

However, rising import payments after the ease in restrictions related to the coronavirus would increase the demand for the dollars.

The exports of the country reached an all-time high of $25.26 billion during the fiscal year 2020/21. Further, the country exports goods worth $2.69 billion in June 2020, which is the highest-ever in any month.

Recently, Prime Minister Imran Khan has directed the authorities to incentivise remittances by offering a loyalty programme to the overseas Pakistanis. Under the programme, certain benefits would be offered to the expatriates.

The inflows of remittances registered 29.4 per cent growth to $26.7 billion during the first 11 months (July-May) 2020/21 as against $20.6 billion in the same period of the last fiscal year.

The local currency may also get support from improved balance of payments. The country posted a current account surplus of $153 million during the first 11 months of the fiscal year 2020/21, compared with the deficit of $4.32 billion in the same months of the preceding fiscal year.

However, rising import bill will remain a concern for the rupee stability. The economic activities witnessed improvement after ease in the coronavirus lockdowns, which created demand for the imported raw materials, as well as finished products in the domestic markets.

During the outgoing week (June 28 to July 2), the rupee witnessed a slight increase. The exchange rate started the week at Rs158.21 against the dollar and ended the week at Rs157.87 on July 2, 2021.

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