Karachi, November 4, 2024 – The Pakistani rupee eased slightly against the US dollar on Monday, trading at PKR 277.79 in the interbank market, reflecting a modest 9 paisa depreciation from the previous Friday’s close of PKR 277.70.
Currency analysts attribute this decline to increased demand for the dollar, driven by a surge in foreign payments from importers and corporations at the start of the week.
Despite this minor depreciation, experts remain optimistic about the rupee’s medium-term trajectory, pointing to favorable economic indicators that could bolster its stability. The State Bank of Pakistan (SBP) recently reported a $32 million rise in foreign exchange reserves, with reserves standing at $16.049 billion as of October 25, 2024. This increase, fueled by a $115 million gain in SBP’s official reserves, has provided some relief to Pakistan’s balance of payments position.
Currency experts have also highlighted positive trade data as a key factor supporting the rupee. According to the Pakistan Bureau of Statistics (PBS), the trade deficit shrank by 5.59% in the first four months of FY2024-25 (July-October), narrowing to $6.97 billion from $7.39 billion in the same period last year. This improvement reflects a robust export performance alongside tempered import growth, providing a boost to the rupee’s outlook.
Exports during this period surged by 13.45% year-on-year, reaching $10.88 billion compared to $9.59 billion last year. This increase in export revenue has been attributed to growing demand in major export markets, which has helped to offset a modest 5.17% rise in imports to $17.85 billion. The resulting improvement in the trade balance has positively influenced the rupee, reinforcing confidence among currency experts.
Market analysts believe that the rupee could find additional support if these favorable trends continue. The rise in foreign exchange reserves, narrowing trade deficit, and stronger export numbers signal a cautiously optimistic outlook for the rupee’s stability. Enhanced dollar inflows from exports and remittances, combined with a contained trade deficit, create a supportive environment for the rupee amid ongoing economic recovery.
“The recent data indicates that the rupee may maintain stability in the days ahead,” said a currency expert. “With rising reserves and improving trade figures, the outlook for Pakistan’s currency is encouraging, provided that the positive momentum in exports and controlled import growth persists.”
In the face of ongoing economic reforms and a supportive external environment, the rupee’s stability will depend on sustained trade improvements, favorable forex reserve levels, and careful monetary policy measures by the SBP.
