Karachi, November 24, 2023 – The Pakistani Rupee (PKR) witnessed a depreciation of PKR 0.10 against the US Dollar on Friday, closing at PKR 285.37 in the interbank foreign exchange market.
This decline was attributed to a surge in dollar demand, driven by month-end import and corporate payments.
Currency experts pointed out that the weekend often sees an increase in dollar demand as importers traditionally book dollars for payments to foreign suppliers, especially during holiday periods. This heightened demand for the greenback contributed to the weakening of the local currency.
A significant factor influencing the depreciation was the reported decline in the country’s official foreign exchange reserves. The State Bank of Pakistan (SBP) disclosed a weekly decrease of $217 million in its reserves, citing external debt payments as the primary reason for the reduction.
As of November 17, 2023, the SBP’s official reserves stood at $7.18 billion, marking a substantial drop from the previous week’s figure of $7.397 billion on November 10, 2023. This decline is part of a broader trend, with the country’s total foreign exchange reserves decreasing by $234 million to $12.302 billion by the week ending November 10, 2023, compared to the previous week’s level of $12.536 billion.
The economic challenges faced by Pakistan have intensified as external debt payments continue to exert pressure on the nation’s foreign exchange reserves. Financial experts and policymakers are closely monitoring the situation, emphasizing the need for strategic measures to address the ongoing economic challenges.
Despite the current setbacks, experts express optimism about the potential improvement in reserves. Anticipated inflows from the International Monetary Fund (IMF) are expected to provide much-needed relief to Pakistan’s economic woes. The disbursement from the IMF is also anticipated to pave the way for additional funds from other multilateral agencies.
In a recent announcement, Pakistan’s finance minister revealed that approximately $1.5 billion would be made available to the country from foreign donor agencies shortly after the disbursement by the IMF. This injection of funds is anticipated to bolster the country’s foreign exchange reserves and support efforts to stabilize the economy.
As Pakistan navigates these economic challenges, the government remains committed to implementing reforms and seeking external support to strengthen its financial position. The unfolding developments in the coming weeks will be closely monitored as the nation works towards economic recovery and stability.
