Karachi, June 27, 2023 – The Pakistani Rupee (PKR) displayed a notable recovery against the US dollar on Tuesday, closing at PKR 285.99 in the interbank foreign exchange market.
The rupee gained 72 paisas in value, marking a positive shift from the previous day’s closing rate of PKR 286.71 in the interbank foreign exchange market.
Currency experts have attributed the market’s positive sentiment to the government’s efforts aimed at regaining the International Monetary Fund (IMF) program. A significant development in this regard was the State Bank of Pakistan’s (SBP) decision to lift the ban on import payments last Friday, despite the limited availability of US dollars. This move was seen as a step toward fulfilling the IMF’s conditions.
Furthermore, the government’s announcement of an additional tax burden on citizens for the upcoming fiscal year, commencing on July 1, 2023, was considered another measure aimed at securing the IMF program. These initiatives demonstrate the government’s commitment to economic reforms and fiscal discipline.
The recent statement by the SBP regarding the receipt of $300 million in proceeds from commercial loans during the past week has also contributed to the strengthening of the rupee. This development has instilled confidence in the market, indicating positive investor sentiment.
However, Pakistan’s foreign exchange reserves experienced a significant decline of $514 million over the previous week. As of June 16, 2023, the reserves stand at $8.864 billion, down from $9.378 billion on June 9, 2023. This decline raises concerns about the country’s repayment capabilities and underscores the challenges Pakistan faces on the external front.
Despite a substantial reduction in the current account deficit during the first eleven months of the current fiscal year, Pakistan continues to grapple with pressures on foreign exchange reserves. The government will need to implement further measures to stabilize and strengthen the economy, attract foreign investment, and boost exports in order to effectively mitigate these challenges.
Economic analysts and experts emphasize that sustained efforts to improve the balance of payments, enhance export competitiveness, and attract foreign direct investment will be crucial for Pakistan’s economic stability and long-term growth. The government’s commitment to the IMF program, combined with prudent monetary and fiscal policies, will play a pivotal role in addressing the country’s external challenges and ensuring a sustainable economic future.
Rupee Inches Up Against Dollar in Interbank, Ends at PKR 286.71
