The United States dollar fell to a six-month low against the rupee in the interbank market, losing 14 paisas to reach Rs159.97, according to data released by the State Bank of Pakistan on Tuesday.

The last time the dollar stood at similar levels was earlier this year on May 8, when it was changing hands at Rs159.97 in the interbank market.

“Uptick in remittance inflows ($2 billion per month since the beginning of FY21), a quarterly current account surplus ($792 million) after more than five years (last time a surplus was recorded was in 3QFY15) against a deficit of $1.49 billion in the same period last year coupled with the dollar depreciating against all major currencies (the dollar index is down 10pc since March) are some of the factors that led to appreciation of the rupee,” said Sana Tawfiq, analyst at Arif Habib Ltd.

The deferment of $1.8bn loan repayment to G20 till December 2020 – with a further relaxation anticipated till June 2021 – and expected improvement in inflows with the launch of Roshan Digital Account have also helped stabilise the exchange rate, she added.

Tawfiq said that the REER (Real Effective Exchange Rate) stands at 94.1199 as of September, 2020, which shows further room for the rupee’s appreciation.

“Given these factors, we expect the PKR to hover in the range of 159-161 till December 2020,” she said.

The local currency has gained as much as six per cent against the dollar after hitting a low of Rs168.45 in August. Outlook for the rupee has improved in the last month mainly on the back of higher foreign inflows in the form of remittances and export earnings. On the flipside, outflows have declined due to the debt suspension programme by G20 countries and lower imports.

“Many factors have contributed to the rupee’s appreciation,” said Forex Association of Pakistan President Malik Bostan.

“The government’s facilitation to overseas Pakistanis through the Roshan Digital Account has increased the dollar liquidity in the interbank market.”

Inflows through the Roshan Digital Account, which had begun at Rs100 million per day in September, have now increased to Rs400m, Bostan said, adding that this figure is expected to increase further as some overseas Pakistanis are still unable to open their Roshan accounts.

On the other hand, Bostan said, the government’s amnesty scheme for the construction sector had also increased investment. “The construction amnesty has helped the exchange rate as investments have poured into property markets.”

The State Bank of Pakistan is yet to release official statistics on the total number of accounts opened or the amount deposited through the Roshan Digital Accounts by overseas Pakistanis.