Karachi, June 28, 2024 – The Pakistani Rupee on the last trading day of fiscal year 2023-24 on Friday appreciated slightly, ending at PKR 278.34 against the dollar in the interbank foreign exchange market.
This marks a modest gain of four paisas in rupee value from the previous day’s closing of PKR 278.38.
Currency experts attribute this slight gain to several factors. Importers, while still needing dollars for foreign payments, have taken a more cautious approach in their buying activities.
This cautious stance has helped balance the demand for dollars from the corporate sector. Additionally, a steady inflow of export receipts has provided some support for the rupee.
Analysts noted that, being the last day of the fiscal year, authorities likely intervened to pump foreign currency into the market to support the rupee despite a decline in foreign exchange reserves. Pakistan recorded a fall of $208 million in foreign exchange reserves for the week ending June 21, 2024, according to the State Bank of Pakistan (SBP).
The total reserves now stand at $14.207 billion, down from $14.415 billion the previous week, which ended on June 14, 2024. This decrease is primarily attributed to a significant drop in the official reserves held by the SBP, which fell by $239 million to $8.896 billion as of June 21, compared to $9.135 billion a week earlier. The central bank attributed this decline to repayments made by the government of Pakistan against foreign loans.
The fall in the SBP’s reserves comes amid ongoing economic challenges for Pakistan, including efforts to manage its external debt and secure financial stability. The country has been actively seeking support from international financial institutions and friendly nations to bolster its economic standing. While necessary, the repayment of foreign loans continues to exert pressure on the country’s reserves.
Economic analysts also highlight the potential impact of recent measures outlined in the 2024-25 budget. These measures appear to have made importers more cautious when placing new orders, leading to a reduction in immediate dollar demand and contributing to the rupee’s stability. As the new fiscal year begins, market participants will closely watch for further policy decisions and external economic conditions that could influence the rupee’s trajectory.
Pakistani Rupee’s slight gain against the dollar on the last trading day of FY24 reflects a complex interplay of cautious importer behavior, export receipt inflows, and strategic market interventions. The economic landscape remains challenging, with the country’s reserves under pressure from debt repayments and the need for continued financial support from international partners.