Karachi, March 19, 2024 – The Pakistani Rupee closed firmer against the US Dollar at PKR 278.64 in the interbank foreign exchange market today, marking a marginal gain compared to the previous day’s closing of PKR 278.63.
Currency analysts attribute this stability to various factors contributing to the strengthening of the rupee against the greenback. Among these factors are the recent inflows of remittances and export receipts, which have bolstered the country’s foreign exchange reserves. Moreover, optimism prevails regarding the anticipated inflows from the International Monetary Fund (IMF).
The successful completion of the IMF review is of paramount importance for Pakistan, as it sets the stage for the disbursement of the second tranche amounting to $1.2 billion under the $3 billion Stand-By Arrangement (SBA). This injection of funds is anticipated to provide vital support to Pakistan’s economy, aiding in its stabilization and growth.
Analysts highlight the significant increase in foreign inflows as a contributing factor to the rupee’s appreciation against the dollar. Recent data released by the State Bank of Pakistan (SBP) indicates a noteworthy rise in the country’s weekly foreign exchange reserves, reaching $13.151 billion as of the week ending March 8, 2024. This surge reflects positive momentum within the economy and boosts investor confidence.
Moreover, Pakistan witnessed a notable 13 percent Year-on-Year (YoY) growth in workers’ remittances during February 2024. Remittance inflows totaled $2.25 billion, up from $1.99 billion recorded during the same period the previous year. This substantial increase underscores the resilience and stability of Pakistan’s economy, further enhancing its attractiveness to investors.
In tandem with the surge in remittances, Pakistan’s exports registered a commendable 9 percent increase during the first eight months of the fiscal year 2023-24 (July to February). Export figures climbed to $20.35 billion, compared to $18.67 billion in the corresponding period of the previous fiscal year. This growth not only reinforces the value of the rupee but also augurs well for the overall economic outlook, indicating a positive trajectory for trade and economic activity.
The combination of robust remittance inflows, increased export earnings, and expectations of IMF support has bolstered Pakistan’s economic resilience and contributed to the strengthening of the rupee against the dollar. As Pakistan continues to navigate its economic challenges and capitalize on its strengths, analysts remain cautiously optimistic about the currency’s trajectory and the broader economic outlook.
In conclusion, the Pakistani Rupee’s firm performance against the US Dollar reflects the country’s improving economic fundamentals, driven by positive indicators such as rising remittances, export growth, and anticipated IMF assistance. These developments underscore Pakistan’s resilience and potential for sustained economic recovery and growth in the coming months.
