Rupee Extends Decline to PKR 278.61 Against Dollar

Rupee Extends Decline to PKR 278.61 Against Dollar

Karachi, July 11, 2024 – The Pakistani Rupee continued its downward trend against the US dollar, closing at PKR 278.61 in the interbank market on Thursday.

This marks a 10 paisa drop in rupee from the previous day’s close of PKR 278.51, extending the rupee’s decline for the second consecutive day.

Currency analysts attribute this weakening in rupee to increased demand for dollars, driven by rising imports and corporate payments. Importers have particularly ramped up their orders from foreign suppliers, putting additional pressure on the local currency.

Despite the recent depreciation, analysts remain optimistic about the rupee’s near-term stability. They cite Pakistan’s bolstered foreign exchange reserves and an improved trade balance as supportive factors.

The State Bank of Pakistan (SBP) recently reported a substantial increase of $494 million in its foreign exchange reserves for the week ending June 28, 2024. This brought the central bank’s total reserves to $9.39 billion, up from $8.896 billion the previous week. This increase highlights Pakistan’s strengthened external financial position amid ongoing economic developments.

According to the SBP, the rise in reserves mainly reflects inflows from various multilateral agencies, indicating growing international confidence and support for Pakistan’s economic stability and growth prospects.

Market analysts have also noted positive trends in Pakistan’s trade performance. Data from the Pakistan Bureau of Statistics (PBS) shows that exports surged by 10.54 percent to $30.65 billion in fiscal year 2023-24, up from $27.72 billion the previous fiscal year. Meanwhile, imports saw a modest decline of 0.84 percent, totaling $54.73 billion in FY24 compared to $55.20 billion in FY23. This reduction in the trade deficit by 12.32 percent to $24.09 billion in FY24, down from $27.47 billion the previous year, signifies encouraging progress for Pakistan’s balance of payments and overall economic stability.

Economic experts anticipate that these positive economic indicators, coupled with expanding foreign exchange reserves, will likely bolster the rupee against the dollar in the coming months. This outlook suggests a stable future for Pakistan’s currency and economic resilience amidst global economic shifts.