Karachi, July 25, 2024 – The Pakistani Rupee showed signs of recovery against the US Dollar on Thursday, gaining some ground after a three-day losing streak.
The rupee appreciated by 9 paisas, closing at PKR 278.41 per US dollar in the interbank foreign exchange market, compared to the previous day’s closing of PKR 278.50.
Currency experts attributed the rupee’s appreciation to increased inflows of export receipts and remittances, which provided much-needed support to the local currency. Despite these positive inflows, the demand for dollars for import and corporate payments remained high throughout the day, tempering the rupee’s gains.
Analysts maintain an optimistic outlook for the rupee, pointing to several favorable economic indicators. Higher foreign exchange reserves and a narrowing current account deficit are seen as stabilizing factors that could support the rupee in the coming months.
Additionally, the recent staff-level agreement (SLA) with the International Monetary Fund (IMF) has bolstered confidence in the rupee. The IMF’s $7 billion extended fund facility for Pakistan is expected to enhance the country’s financial stability. This agreement, which aims to support Pakistan’s economic reforms and stabilize its economy, is seen as a significant positive development for the rupee’s medium-term prospects.
The improvement in foreign exchange reserves, which provides a buffer against external shocks, coupled with a narrowing current account deficit, reflects a more balanced trade environment. These factors are crucial for maintaining the stability of the rupee against the dollar and other major currencies.
Market watchers are also keeping an eye on the ongoing economic policies and reforms being implemented by the government. These measures are aimed at boosting economic growth, enhancing export performance, and attracting foreign investment, all of which are vital for sustaining the rupee’s strength.
While the rupee’s recent recovery is a positive sign, continued vigilance and supportive economic policies will be essential to maintain and build on this momentum. The interplay between inflows from exports and remittances, demand for import payments, and broader economic conditions will determine the rupee’s trajectory in the near term. Stakeholders and investors will be closely monitoring these dynamics to gauge the future performance of the Pakistani rupee.