Karachi, February 1, 2024 – The Pakistani Rupee (PKR) displayed remarkable stability against the US dollar in the interbank foreign exchange market, closing at PKR 278.48 on Thursday.
This modest gain of PKR 0.02 from the previous day’s closing of PKR 279.50 is indicative of the positive trajectory of Pakistan’s economic landscape.
Several factors have contributed to the recent strengthening of the Pakistani currency. One significant influence is the injection of funds, including a substantial $700 million from the International Monetary Fund (IMF). This financial boost has played a pivotal role in enhancing the country’s balance of payments and stabilizing the exchange rate.
The State Bank of Pakistan (SBP) reports a noteworthy increase in foreign exchange reserves, which soared by $36 million to reach $13.257 billion by the week ending January 5, 2024, compared to $13.221 billion at the close of December 29, 2023. While analysts acknowledge this positive development, they emphasize the need for a comprehensive perspective, noting that reserves are still recovering to levels observed in August 2021.
The strengthening of the Rupee is also attributed to effective fiscal policies and a favorable trade balance. Notably, the first half of fiscal year 2023-24 witnessed a substantial 16.28 percent decrease in the import bill, falling from $31.21 billion to $26.13 billion. In contrast, exports experienced a commendable 5.17 percent increase, reaching $14.98 billion. This contributed to a 34.79 percent contraction of the trade deficit, dropping from $16.96 billion to $11.15 billion during the same period.
These positive economic indicators have instilled confidence in financial markets, with currency experts foreseeing the continuation of the Rupee’s positive momentum against the US dollar. Analysts emphasize the significance of ongoing prudent fiscal policies and effective management of external balances in maintaining this upward trajectory.
As Pakistan navigates the challenges of the global economic landscape, the current economic indicators present an optimistic outlook for the nation’s stability and resilience. The combination of international financial support and domestic economic measures has proven effective, showcasing the country’s ability to weather uncertainties.
Investors and analysts are closely monitoring these developments, optimistic about the sustained upward trajectory of Pakistan’s economic progress. The nation’s ability to maintain fiscal discipline and capitalize on the positive trends in trade and reserves will be crucial in ensuring continued economic stability in the coming months.
