Weekly Review: Rupee – Money market is expected to maintain its current level against the dollar next week amid reports of positive sentiments regarding various relief measures for duties and taxes in the upcoming 2021/22 budget.
The government is expected to announce the 2021/22 federal budget on June 11 (Friday). Minister of Finance Shaukat Tarin recently stated on several occasions that the government plans to encourage exports by reducing the rate of duties and taxes on the import of raw materials.
The latest statistics showed that the country’s trade deficit swelled by 30% in the first 11 months (July-May) 2021/22.
In addition, inflows in the form of export earnings and workers’ remittances would also help the local currency to remain stable against the greenback. However, concerns about the depreciation of the rupee are likely to remain intact due to high import payments in the last days of the current fiscal year.
The inflows, however, continued their upward trend, with the country rising from $ 278 million to $ 23.29 billion in the week ending May 28. Meanwhile, official reserves maintained by the State Bank of Pakistan (SBP) also increased to $ 16.13 billion during the week.
Weekly review: Rupee
Exports grew 14 percent to $ 22.56 billion during the period, while the import bill jumped 22 percent to $ 49.84 billion. During the week (May 31-June 4), the rupee lost 22 paisas against the dollar, due to official statements regarding the projection of GDP growth at 3.94 percent, increasing the demand for imported goods. .
The local currency has gained 13.43 rupees, or 8%, against the dollar in the current fiscal year (July 1, 2020 – June 4, 2021). On June 30, 2020, the exchange rate was recorded at Rs 168.05 against the US dollar. The rupee closed at Rs154.62 against the dollar on the interbank market on Friday.