Karachi, October 19, 2023 – The Pakistani Rupee (PKR) demonstrated its strength against the US Dollar, closing at PKR 278.81 in the foreign exchange market on Thursday. This marks a notable gain of PKR 1.48 against the US Dollar from the previous day’s closing rate of PKR 280.29 in the interbank foreign exchange market.
The remarkable appreciation of the Rupee can be predominantly attributed to the significant surge in foreign exchange reserves held by the State Bank of Pakistan (SBP). The central bank reported a substantial weekly increase of $31 million in its foreign exchange reserves.
Consequently, this boost has propelled the SBP’s official foreign exchange reserves to $7.647 billion for the week ending on October 6, 2023, compared to the previous week’s total of $4.616 billion ending on September 28, 2023.
The recent resurgence of the US Dollar over the past two days has garnered considerable attention, especially considering its prior decline. On Wednesday, the exchange rate witnessed a substantial hike of PKR 3.26, in contrast to the closing rate of PKR 277.03 on October 17, 2023, in the interbank foreign exchange market.
This shift in currency dynamics can be attributed to several factors. Analysts have highlighted the scheduled foreign payments Pakistan is required to make in settling external debt, which has exerted pressure on the local currency. These debt-related transactions have played a pivotal role in the recent fluctuations in the PKR-to-USD exchange rate.
Furthermore, the surge in optimism surrounding Pakistan’s economic recovery has generated increased domestic demand for imported raw materials and finished goods. As economic activities gain momentum, industries and businesses are anticipated to import more goods to meet the growing demands, further impacting the exchange rate.
The noteworthy resilience and strengthening of the Pakistani Rupee against the US Dollar reflect a positive trajectory for the nation’s economy. This underscores the effectiveness of prudent monetary and exchange rate policies, instilling a sense of stability and confidence among investors and the business community.
