- Pakistan Rupee (PKR) strengthens 2.4% YTD
- Strong remittances, debt relief & foreign exchange reserves boost PKR
- US Dollar (USD) soars versus major peers
- US Senate passes $1.9 trillion covid stimulus package
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is declining at the start of the week, extending losses from the previous week. The pair shed -0.25% across last week, settling on Friday at 158.35. At 11:15 UTC, USD/PKR trades -0.9% at 156.97.
The Rupee continues to strengthen thanks to rising remittances, debt relief and increasing foreign exchange rate reserves.
Over the course of January and February the Pakistani Rupee has strengthened versus the US Dollar by around 2.4%. The currency has strengthened from just short of 161.00 to its current value of just below 157.00.
The latest figures from the State Bank of Pakistan point to the country’s GDP growing by 2.5% in the current FY21 after contracting by -0.4% last year.
Pakistan has also recorded a 24% year on year increase in workers remittances in the 7 months of FY21 and foreign exchange reserves held by the central bank have increased $70 million to $12.978 billion.
Meanwhile the US Dollar is falling versus the Pakistani Rupee. However, it is powering higher versus its major peers. The US Dollar Index which measures the greenback versus a basket of 6 major peers now trades 0.3% higher on the day at 92.30 a three-week high.
The US Senate passed Joe Biden’s $1.9 trillion covid stimulus package over the weekend boosting expectations of a strong economic recovery this year.
The move comes after Friday’s closely watched US non-farm payrolls showed the 379,000 new jobs were added in February, double what analysts were expecting. Whilst the unemployment rate ticked lower to 6.2%, down from 6.3%.
A huge stimulus package, an improving US jobs market and an accelerating vaccine rollout means investors are expecting US inflation to pick up firmly across the year prompting the Fed to start tightening monetary policy sooner than anticipated. US treasury yields have pushed over 1.60% to a fresh yearly high, unnerving investors.