The Pakistani currency surged to a six-week high, standing just below Rs284 against the US dollar in the interbank market on Tuesday. After a brief dip, the State Bank of Pakistan’s (SBP) data reveals a 0.04% increase, or Rs0.12, closing at Rs283.78 against the greenback. This uptrend follows a substantial boost in foreign currency inflows into the domestic economy, with Roshan Digital Account (RDA) transactions by overseas Pakistanis surpassing $7 billion in November alone.

The RDA inflows are proving instrumental in stabilising the country’s foreign exchange reserves, with overseas Pakistanis investing a net $137 million in Naya Pakistan Certificates (NPCs) and the stock market through digital banking in November 2023.

Simultaneously, a drop in international petroleum oil prices has further bolstered the rupee’s resurgence. Given Pakistan’s significant reliance on energy imports, the reduction in international energy prices is expected to not only slash the import bill but also decelerate imported inflation, crucial for stabilising and fostering economic activities in the country.

Read Rupee dips, but RDA spikes to $7b

In the open market, the Exchange Companies Association of Pakistan (ECAP) reports that the currency has maintained its strength at Rs284.75/$ for the third consecutive working day.

Meanwhile, gold prices in Pakistan have witnessed a notable decline, a trend attributed both to global market dynamics and the appreciating rupee. The commodity has experienced a Rs1,800 drop to reach Rs213,600 per tola (11.66 grams) in Pakistan, reflecting a broader decline as reported by the All Pakistan Sarafa Gems and Jewellers Association in the international market, where gold has decreased by $13 to $2,005 per ounce (31.10 grams).

The rupee’s appreciation has played a crucial role in the downturn in gold prices, highlighting Pakistan’s dependence on imports.

Published in The Express Tribune, December 13^th, 2023.

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