Karachi, March 14, 2024 – The interbank market closed with stability in the exchange rate between the Pakistani Rupee (PKR) and the US Dollar on Thursday.
Closing at PKR 278.77 to the dollar, the rupee’s value remained consistent compared to the previous day’s closing rate of PKR 278.78 in the interbank foreign exchange market.
This resilience in the currency market occurred despite heightened demand for foreign currency, primarily driven by import and corporate payments.
Analysts attribute this stability to the influx of foreign remittances and export receipts. The State Bank of Pakistan (SBP) reported a significant 13 percent Year-on-Year (YoY) growth in workers’ remittances during February 2024. Data from the central bank reveals a surge in remittances to $2.25 billion in February, marking a notable increase from the $1.99 billion recorded in the same period the previous year. This upswing in remittances signals a positive trend for the country’s economic well-being.
In addition to remittances, Pakistan’s exports experienced a commendable 9 percent increase during the period of July to February 2023-24. Export figures rose to $20.35 billion in the first eight months of the current fiscal year, reflecting growth from the $18.67 billion recorded in the corresponding period of the previous fiscal year. This boost in export revenue not only bolsters the value of the rupee but also bodes well for the overall economic outlook.
Despite the positive indicators, currency experts express apprehension regarding the decline in foreign exchange reserves, warning that this trend could exert pressure on the rupee’s value in the near future. Weekly data released by the State Bank of Pakistan reveals a decrease of $19 million in net foreign exchange reserves as of March 1, 2024. The combined reserves now amount to $13.02 billion, down from the $13.039 billion recorded a week earlier.
While the stability in the PKR to Dollar exchange rate is a positive sign, the declining foreign exchange reserves highlight the importance of sustaining efforts to bolster economic fundamentals and attract foreign investment.
The stability in the interbank market provides a moment of relief amidst global economic uncertainties, offering a favorable environment for businesses and investors to navigate the currency landscape. However, it also underscores the need for proactive measures to strengthen Pakistan’s economic resilience and ensure long-term stability in the currency markets.
