Karachi, October 7, 2024 – The Pakistani rupee weakened against the US dollar on Monday, closing at PKR 277.64 in the interbank market. This marks a slight decline of 12 paisas compared to the previous session’s closing rate of PKR 277.52.
Currency experts attribute the rupee’s depreciation to increased dollar demand for import and corporate payments at the start of the week. Traditionally, the rupee experiences pressure during the early part of the week as importers and corporate entities settle payments held over the weekend.
Despite this dip, market analysts remain optimistic about the rupee’s overall stability in the coming days. This optimism stems from a significant rise in Pakistan’s foreign exchange reserves, which are nearing $16 billion—a level not seen in recent months. The State Bank of Pakistan (SBP) reported that reserves surged by $1.11 billion to reach $15.98 billion as of September 27, 2024, up from $14.87 billion the previous week.
This boost in reserves is largely attributed to recent inflows from the International Monetary Fund (IMF), providing critical support to Pakistan’s struggling economy. The IMF assistance, combined with other multilateral and bilateral financing, has strengthened the country’s financial position, easing concerns over its balance of payments.
The improvement in foreign reserves has been hailed as a crucial step in stabilizing Pakistan’s economy, which has been grappling with external challenges such as rising import costs and inflation. A narrowing trade and current account deficit has also contributed to the improved economic outlook. As these deficits shrink, the pressure on the rupee has been reduced, helping to maintain a more stable exchange rate.
Moreover, a recent uptick in remittances from overseas Pakistanis, along with stronger export receipts, has bolstered market confidence. These factors are expected to support the rupee in the medium term by reducing the demand for dollars, especially as the country benefits from external financial inflows and improved fiscal management.
While challenges remain, experts believe that with prudent economic policies and continued support from international organizations, the rupee could see more resilience in the weeks ahead, mitigating the impacts of import-driven demand for the dollar.