Dollar Weakens to PKR 278.40 at Interbank Closing

Dollar Weakens to PKR 278.40 at Interbank Closing

Karachi, July 9, 2024 – The US dollar weakened against the Pakistani Rupee on Tuesday, closing at PKR 278.40 in the interbank foreign exchange market. This marks a slight decrease of 10 paisas from the previous day’s closing of PKR 278.50.

Currency experts attributed this softening of the dollar to reduced demand for import and export payments. Additionally, inflows from export receipts and remittances have lessened the need for dollars, further easing its value against the rupee. The decline is also linked to a rise in foreign exchange reserves and promising trade figures for the fiscal year ending June 30, 2024.

Last week, the State Bank of Pakistan (SBP) reported a substantial increase of $494 million in its official foreign exchange reserves for the week ending June 28, 2024. This brought the total reserves of the central bank to $9.39 billion by the end of June, up from $8.896 billion a week earlier on June 21. This rise underscores a strengthening of Pakistan’s external financial position amid ongoing economic developments.

The SBP credited the increase in reserves primarily to inflows from various multilateral agencies, reflecting growing confidence and support from international financial entities towards Pakistan’s economic stability and growth prospects.

Market analysts also highlighted other factors contributing to the rupee’s potential recovery against the dollar, including a notable increase in exports and a slight decline in imports during the fiscal year 2023-24. According to data released by the Pakistan Bureau of Statistics (PBS), Pakistan’s exports saw robust growth of 10.54 percent, reaching $30.65 billion in FY24 compared to $27.72 billion in the previous fiscal year.

Conversely, the import bill for Pakistan recorded a modest decrease of 0.84 percent, amounting to $54.73 billion in FY24 from $55.20 billion in FY23. This narrowing of the trade deficit, which contracted by 12.32 percent to $24.09 billion in FY24 from $27.47 billion in the previous fiscal year, signifies positive developments for Pakistan’s balance of payments and overall economic stability.

Experts believe these positive economic indicators, combined with the increasing foreign exchange reserves, are likely to support the rupee’s strength against the dollar in the coming months. The current trends suggest a stabilizing financial environment in Pakistan, fostering greater investor confidence and potentially attracting further international investment.

The exchange rate fluctuations and their underlying causes are crucial for stakeholders in Pakistan’s economy, from policymakers and investors to businesses and consumers. Monitoring these trends will be essential for anticipating future economic conditions and making informed decisions in the financial and commercial sectors.