Karachi, December 17, 2023 – Currency analysts are anticipating a stable trajectory for the Pakistani Rupee (PKR) against the US Dollar in the upcoming week, starting December 18, 2023.
This optimistic outlook is underpinned by recent positive developments, including a rise in foreign exchange reserves and an overall favorable sentiment prevailing in the country’s financial markets.
As of the week ended December 15, 2023, the PKR closed at 283.87 against the dollar in the interbank foreign exchange market. This marks a nominal appreciation from the previous closing of 283.25. Experts attribute this resilience to the central bank’s efforts in maintaining a comfortable level of foreign exchange reserves, a crucial element in preserving the balance of payments.
Notably, Pakistan’s foreign exchange reserves experienced a noteworthy increase of $99 million in the week ending December 8, 2023. While this surge is indicative of positive economic momentum, the total reserves stand at $12.206 billion, still significantly below the peak levels observed in August 2021 when they reached $27.2 billion. Despite this, the recent uptick in reserves is viewed as a positive sign, showcasing incremental growth in the country’s financial strength.
Analysts highlighted the government’s concerted efforts to curtail the import bill, a move aimed at alleviating pressure on the external sector. The import bill for Pakistan recorded a substantial decline of 17.32 percent to $21.55 billion during July – November of fiscal year 2023-24, compared to $26.06 billion in the corresponding period of the previous fiscal year.
Conversely, exports displayed a modest gain, rising by 2 percent to $12.17 billion during the first five months of the current fiscal year. This marginal increase, while positive, underscores the need for sustained efforts to boost export performance.
Despite these positive indicators, experts caution that the surge in dollar demand for imports and corporate payments by the end of the current month could exert pressure on the local currency. To counteract potential challenges, they recommend that the government focuses on ensuring inflows through remittances, exports, and foreign remittances to fortify the rupee’s value in the future.
In conclusion, the outlook for the Pakistani Rupee in the week starting December 18, 2023, appears robust, supported by increased foreign exchange reserves and a shrinking import bill. The government’s ongoing efforts to bolster economic indicators, coupled with strategic measures to enhance inflows, will play a crucial role in sustaining the stability of the local currency against external pressures.
