Karachi, February 23, 2024 – The Pakistani Rupee (PKR) experienced a decline against the US dollar on Friday, slipping by PKR 0.03 in the interbank foreign exchange market.
The closing rate stood at PKR 279.36 to the dollar, compared to the previous day’s closing rate of PKR 279.33. The weakening of the local currency is attributed to a surge in demand for the US dollar for import and corporate payments.
Currency experts noted that the ease in the value of the Pakistani Rupee is primarily driven by an increased demand for the greenback to facilitate import transactions and meet corporate payment obligations. Despite the depreciation, experts pointed out that the rupee’s value was spared from a significant fall due to a reduction in political tensions.
However, analysts highlighted that the rupee has been under pressure against the US dollar due to a decline in the foreign exchange reserves of the country. The weekly data for the week ending February 16, 2024, revealed a dip of $51 million in Pakistan’s foreign exchange reserves. The reserves were recorded at $13.098 billion, compared to $13.149 billion the previous week (February 9, 2024).
While the decline in foreign exchange reserves is noteworthy, it’s crucial to contextualize these figures by noting that the current levels are still below the robust reserves observed in August 2021. The decrease in reserves is indicative of the challenges faced by Pakistan in managing its external finances and meeting its import obligations.
The pressure on the rupee comes at a time when the country is grappling with economic uncertainties, including fluctuations in global commodity prices and geopolitical tensions. The rise in demand for the US dollar for import-related activities and corporate payments further underscores the delicate balance that needs to be maintained to ensure currency stability.
In the face of these challenges, policymakers and financial authorities are likely to closely monitor the situation to implement measures that can help stabilize the currency and address concerns related to the foreign exchange reserves. A prudent and well-calibrated approach is necessary to manage the balance between meeting import requirements and maintaining the stability of the national currency.
As the situation unfolds, market observers will be keenly watching for any developments that may impact the foreign exchange market and the value of the Pakistani Rupee. The ongoing dynamics in the global economic landscape and regional geopolitical factors will continue to play a crucial role in shaping the currency’s trajectory in the coming weeks and months.
