Karachi, July 11, 2023 – The Pakistani Rupee (PKR) demonstrated a remarkable recovery against the US dollar on Tuesday, closing at PKR 278.57 in the interbank foreign exchange market. This positive trend reflects a gain of PKR 1.23 in the rupee’s value compared to the previous day’s closing rate of PKR 279.80.
Currency experts attribute this recovery to the recent rating upgrade of Pakistan by Fitch Ratings. Just a day prior, Fitch Ratings elevated Pakistan’s Foreign-Currency Issuer Default Rating (IDR) from ‘CCC-‘ to ‘CCC,’ indicating improved external liquidity and funding conditions. This rating upgrade has played a pivotal role in bolstering the confidence of investors and strengthening the value of the Pakistani Rupee against the US dollar.
READ MORE: Pakistani Rupee Sharply Decreases Against US Dollar
Moreover, experts remain optimistic about the future performance of the rupee, highlighting the country’s improving foreign exchange reserves. The State Bank of Pakistan (SBP) recently released data indicating a significant increase of $405 million in foreign exchange reserves within a week. As of the week ending on June 30, 2023, Pakistan’s foreign exchange reserves reached $9.746 billion, marking a rise from the $9.341 billion recorded by the week ending on June 23, 2023.
READ MORE: Rupee Drops Against Dollar to PKR 277.90 on Weekend Demand
In addition to the growing reserves, experts anticipate additional foreign inflows in the coming week, subject to the approval of a bailout package by the executive board of the International Monetary Fund (IMF). Pakistan and the IMF have recently reached a staff-level agreement, which outlines the provision of approximately $3 billion to Pakistan under a 9-month Stand By Agreement (SBA). If approved, this bailout package will further strengthen Pakistan’s position and positively impact the value of the rupee.
READ MORE: Rupee Regains Ground Against Dollar, Closing at PKR 277.04 in Interbank Market
Taken together, the improving foreign exchange reserves and the potential approval of the IMF bailout package provide hope for the continued strengthening of the Pakistani Rupee in the near future. This positive development signifies a step forward for Pakistan’s economy and indicates increased stability in the country’s currency market.
Investors and economists are closely monitoring these developments as they eagerly anticipate the impact on various sectors of the economy. The recovery of the rupee against the US dollar bodes well for trade and investments, offering a more favorable environment for businesses and individuals alike.
READ MORE: Pakistan’s Foreign Exchange Reserves Surge to $9.746 Billion
