Karachi, May 20, 2024 – The Pakistani Rupee (PKR) has depreciated by 9 paisas against the US dollar at the closing of the interbank foreign exchange market on Monday. The rupee ended at PKR 278.30 to the dollar, down from last Friday’s closing of PKR 278.21.
Analysts attributed the slight fall in the rupee’s value to increased dollar demand for import and corporate payments on the first trading day of the week. The demand surge was primarily driven by businesses fulfilling their foreign exchange obligations, creating a temporary uptick in the demand for dollars.
Despite this minor depreciation, analysts maintained a generally positive outlook for the rupee. They highlighted the country’s current account surplus for April 2024 as a significant factor bolstering market sentiment. The surplus indicates that Pakistan exported more goods and services than it imported, reflecting improved economic fundamentals.
Additionally, Pakistan’s foreign exchange reserves have seen a notable increase, providing further support to the rupee. The State Bank of Pakistan (SBP) reported a rise in reserves, which now stand at a comfortable level, enhancing the country’s ability to manage external shocks and meet its international payment obligations.
The ongoing dialogue with the International Monetary Fund (IMF) for the next loan program also played a role in stabilizing the rupee. The discussions are aimed at securing financial assistance to support Pakistan’s economic reforms and stabilization efforts. Positive progress in these talks has contributed to investor confidence, helping to mitigate the pressure on the rupee.
Currency traders and market participants remain cautiously optimistic about the rupee’s performance in the near term. They believe that if the current trends of improved foreign exchange reserves and current account surplus continue, the rupee could stabilize further or even appreciate slightly.
However, they also warned that external factors, such as fluctuations in global oil prices and geopolitical developments, could impact the rupee’s value. Pakistan, being an import-reliant country, is particularly sensitive to changes in international oil prices, which can significantly affect its trade balance and foreign exchange reserves.
In summary, while the Pakistani Rupee experienced a minor depreciation against the US dollar at the start of this week, the overall market sentiment remains positive. The combination of a current account surplus, rising foreign exchange reserves, and ongoing IMF discussions provides a supportive backdrop for the rupee, suggesting a stable outlook for the near future.