Karachi, October 6, 2023 – The Pakistani Rupee (PKR) extended its month-long winning streak against the US dollar on Friday, defying a fall in foreign exchange reserves.
The rupee strengthened by 93 paisas to close at PKR 282.69 to the dollar, showing remarkable resilience in the interbank foreign exchange market.
READ MORE: Pakistani Rupee Surges by 7.65% Against US Dollar Since Hitting Lowest Level
This significant appreciation marks a notable turnaround for the PKR, which has gained PKR 24.41, equivalent to 8 percent, since hitting a historic low of PKR 307.10 to the dollar on September 5, 2023.
What makes this upward trend even more remarkable is the backdrop of declining foreign exchange reserves. Official data released by the State Bank of Pakistan (SBP) on Thursday revealed that Pakistan’s foreign exchange reserves have fallen to $13.03 billion, reflecting a decrease of $132 million for the week ending September 28, 2023, compared to $13.162 billion in the previous week ending September 22, 2023.
READ MORE: Pakistani Rupee on Historic Month-Long Winning Streak Against US Dollar
It is essential to note that Pakistan’s foreign exchange reserves have seen a significant decline since their peak in August 2021 when they stood at a robust $27.2 billion. This substantial decrease has sparked concerns regarding Pakistan’s capacity to meet its import requirements effectively and maintain the stability of the Pakistani rupee in the international currency market.
Analysts attribute the continued strengthening of the PKR against the US dollar to a series of proactive administrative measures aimed at stabilizing the exchange rate. One key strategy has been a rigorous crackdown on currency smuggling and hoarding, effectively curbing speculative trading in the currency market. The State Bank of Pakistan has taken action by canceling the licenses of several exchange companies found involved in illegal forex transactions.
READ MORE: Rupee Remains Strong Against Dollar for 19th Straight Session, Reaching PKR 285.72
Moreover, experts continue to link the PKR’s resilience to the anticipation of external financial support from friendly nations like China and Saudi Arabia, as well as multilateral lenders such as the International Monetary Fund (IMF) and the Asian Development Bank (ADB).
Despite the challenges posed by declining reserves, Pakistan’s efforts to strengthen its currency and seek external support signal a proactive approach to maintain economic stability in a volatile global financial landscape. The future trajectory of the Pakistani rupee remains a subject of close scrutiny, as both internal and external factors continue to shape its performance.
READ MORE: Pakistani Rupee Maintains Strong Streak Against Dollar, Closes at PKR 286.76
