Eid, wedding season to boost reserves, stabilise exchange rate
- October 9, 2013, 6:26 pm
- Business News
- 171 Views
ISLAMABAD, Oct 9 (Online): The Pakistan Economy Watch (PEW) on Wednesday said exchange rate may stabilize soon due to buoyant inflow of remittances ahead of the Eid-ul-Azha.
We hope that the inflows would improve reserves as expatriates are remitting more money to the families and relatives before the Eid, said Dr. Murtaza Mughal, President PEW.
The strong inflow of remittances into the country has been supporting the rupee against the US dollar, now it has gained pace which will certainly help local currency gain points and help reduce uncertainty, he added.
However, he said that the continued capital outflows which have resulted in extra pressure on the foreign exchange reserves and the exchange rate suggest that the gains may be temporary.
Government and SBP would have to take some serious steps to control exchange rate vitality on a permanent basis that include serious market interventions.
Dr. Murtaza Mughal said that there are around seven million Pakistani abroad who started the current fiscal on a high note. After Eid, the wedding season will kick off helping further rise in the remittances.
Remittance influx has provided much-needed cushion to Pakistan’s current account in recent years which can be boosted by improving policies and procedures.
Dr. Mughal said that the world's 232 million international migrants are expected to remit earnings worth $550 billion this year and over $700 billion by 2016.
Remittances are expected to reach $114 billion in South Asia in the current fiscal while Pakistan is expected to receive $15 billion remittances in 2013.
