Karachi, March 22, 2024 – In a notable development, the US dollar weakened against the Pakistani Rupee, closing at PKR 278.14 in the interbank foreign exchange market on Friday.
This marked a decline of PKR 0.26 from the previous day’s closing rate of PKR 278.40, showcasing the resilience and strengthening of the Pakistani currency.
The decline in the dollar can be attributed to several key factors, according to currency market experts. Foremost among them is the surge in remittances and export receipts, which have significantly contributed to Pakistan achieving a current account surplus of $128 million in February 2024. This turnaround from a deficit in the previous year underscores the effectiveness of Pakistan’s economic policies.
Recent data released by the State Bank of Pakistan (SBP) further reinforces the positive trajectory of the nation’s economy. The Current Account Deficit (CAD) has witnessed a remarkable reduction of 74 percent, dropping to $999 million during the initial eight months of fiscal year 2023-24. This substantial reduction reflects the success of policy interventions aimed at bolstering Pakistan’s fiscal health.
Finance Minister Muhammad Aurangzeb acknowledges the pivotal role played by China in supporting Pakistan’s economic stability. The rollover of safe deposits by China has strengthened Pakistan’s foreign exchange reserves, thus contributing to the stability of the rupee. The Finance Minister extends gratitude to the Chinese leadership for their unwavering support, highlighting the significance of SAFE deposits and the refinancing of commercial loans.
Currency analysts emphasize the positive impact of recent inflows from remittances, export receipts, and anticipated funds from the International Monetary Fund (IMF). As of March 8, 2024, weekly foreign exchange reserves have surged to $13.151 billion, signaling confidence among investors and stakeholders.
Pakistan’s economic resilience is further demonstrated by significant growth in workers’ remittances and exports. February 2024 witnessed a 13 percent Year-on-Year (YoY) increase in remittances, totaling $2.25 billion, while exports registered a commendable 9 percent growth during the first eight months of fiscal year 2023-24, reaching $20.35 billion. This growth trajectory bodes well for Pakistan’s economic outlook, fostering optimism for increased trade and economic activity.
As Pakistan continues to navigate economic challenges, the stability of the rupee against the dollar reflects concerted efforts towards sustainable growth and stability. With prudent fiscal policies and strategic partnerships, Pakistan aims to solidify its position as a resilient and dynamic player in the global economic arena.
The steadfastness of the Pakistani Rupee against the dollar serves as a testament to the nation’s economic resilience and prudent policy measures. As Pakistan harnesses emerging opportunities and addresses economic challenges, it remains poised for sustained growth and stability in the years ahead.
