The US Dollar is trading at 159.88 this morning against the Pakistani Rupee, up 0.17% with a YTD return of 3.45%. The pair’s open rate is at 159.87 with a previous close of 159.60. USD/PKR will see a daily range between 159.25 and 160.25 and a 52-week range fluctuating between 152.14 and 168.91.
Since March USD has gained momentum against PKR, remaining above the 165.00 support level from July moving into September. Throughout November the pair has reached lows similar to what was seen in May. PKR has been stronger than anticipated due to weaker demand in US imports. Pakistan has also been bolstering their economy with remittances and exporting which is boosting the overall value of the rupee.
Advisors have reported that exports in November were at the highest level in a decade. During the first 5 months of FY20 “exports have increased to $9.732 billion compared to $9.545 billion over the same period last year.” During November 2020 there was an impressive 7.2% growth; last November exports were $2.011 billion while this year exports grew to $2.156 billion.
According to the consumer price index (CPI), inflation in November has risen by 0.82% month to month and increased by 8.35% year over year mainly due to high food prices.
Whether USD will bounce back to the exchange rates that were seen throughout the summer and fall depends on US President-Elect Joe Biden and his global trading stance. He has recently confirmed that he will not immediately undo the Phase 1 trade agreement with China which will impact the overall market performance of USD. US trade relations are going to take longer to normalize than anticipated which in turn will take USD/PRK exchange rates some time to do the same.
By Surina Nath