PkRevenue.com – Pakistani Rupee on Monday weakened by 4 paisas against the US dollar due to rising foreign currency demand for import and corporate payments.
The rupee ended at PKR 278.37 against the dollar from last Friday’s closing of PKR 278.33 in the interbank foreign exchange market.
Currency market analysts said that the market witnessed pressure on rupee value due to high demand of dollar as market was opened after weekly holidays.
Despite rupee depreciation, the analysts expressed optimism that the rupee would remain stable, with exchange rates expected to stay within a range-bound pattern.
They said that the market would remain stable till presentation of budget 2024-25 schedule for June 7, 2024.
However, the analysts expresses concerns over depleting foreign exchange reserves of the country.
According to the State Bank of Pakistan (SBP), the country’s foreign exchange reserves fell by $270 million during the week ending May 24, 2024, bringing the total down to $14.315 billion. This marks a decrease from the $14.585 billion recorded the previous week on May 17, 2024. The SBP’s report indicated that the official reserves held by the central bank itself dropped by $63 million, from $9.157 billion to $9.094 billion. The central bank attributed this decline primarily to external payments made by Pakistan.
Despite the fall in reserves, the rupee likely to stable this week as the market remains confident in the broader economic trajectory. The finance ministry’s report pointed to various factors contributing to this confidence, including a narrowing current account deficit and improving trade balance. Additionally, the ongoing implementation of economic reforms and fiscal measures has bolstered investor sentiment and market stability.
Market observers have noted that while the decline in reserves poses a challenge, the government’s proactive measures and continued efforts to secure external financing are expected to mitigate the impact. Furthermore, the recent appreciation of the rupee may help ease inflationary pressures, benefiting the overall economy.
The stability of the rupee is crucial for maintaining economic equilibrium, especially as Pakistan navigates through complex global economic conditions. The central bank’s monitoring of exchange rates and its commitment to maintaining stability through prudent monetary policies are pivotal in sustaining this trend.
As the week progresses, market participants will closely watch for any further developments in economic indicators and policy measures that could influence the rupee’s performance. The interplay between domestic economic health and external financial obligations will continue to shape the currency’s trajectory in the near term.
