The currency has been gradually recovering due to a decrease in demand for US dollars for imports, which were partially closed during the country’s financial crisis. In the past two days, the rupee has regained 0.28% (equivalent to Rs0.81), following a previous appreciation of 0.82% (equivalent to Rs2.32) to reach Rs284.03 against the US dollar on Monday.
Reports suggest that the supply of foreign currency has slightly improved in the inter-bank market due to overseas Pakistanis sending higher remittances to their families back home to cope with high inflation during Ramazan, which begins on Friday. Historical data also shows that the inflow of workers’ remittances usually peaks before and during Ramazan.
Furthermore, the rupee has maintained its uptick as reports suggest it had become significantly undervalued. However, a permanent recovery will require a surge in inflows.