Pakistan’s rupee has bounced back after hitting an all-time low this week as the demand for dollars for imports eased. The currency rose by 4.7% to 285 per dollar in early trade on Friday, as reported by Arif Habib Ltd.’s foreign-exchange desk data.
According to Tahir Abbas, head of research at Karachi-based Arif Habib, the demand for dollars had lessened as the market faced additional pressure from external payments. Pakistan has been facing a dollar shortage in the currency market since last year, with its reserves only sufficient to cover one month of imports.
Pakistan is currently experiencing an economic crisis and has been facing delays in securing a loan from the International Monetary Fund. The nation’s outlook has worsened following the political turmoil that resulted from the arrest of opposition leader Imran Khan. Moody’s Investor Service has warned that there is a risk of the country defaulting after June if it cannot secure IMF funding.
Pakistan’s central bank has been intervening to support the rupee, and the country’s stock market has also bounced back in recent weeks. The country’s economic indicators have been volatile in recent years, with the COVID-19 pandemic exacerbating the situation. The government is taking steps to improve the situation by implementing economic reforms and seeking international support to stabilize the country’s economy.