Karachi, April 8, 2024 – The Pakistani Rupee (PKR) faced a slight decline against the US dollar on Monday, closing at PKR 277.95 in the interbank foreign exchange market.
This marginal depreciation of PKR 0.02 from last Friday’s closing rate of PKR 277.93 against the US dollar reflects the ongoing dynamics in the currency market.
Currency experts attributed the decline in the rupee’s value to heightened demand for the dollar at the onset of the trading week, particularly for import and corporate payments. However, they noted that improved sentiments were prevalent due to the surge in foreign exchange reserves held by the State Bank of Pakistan (SBP), which helped mitigate further losses in the rupee’s value.
Official data revealed a marginal increase in the SBP’s foreign exchange reserves, which reached $8.04 billion for the week ending March 29, 2024, compared to $8.022 billion in the previous week. Despite this uptick, the total foreign exchange reserves of the country experienced a decline of $49 million during the same period.
The SBP reported a decrease in the total foreign exchange reserves of the country to $13.379 billion by the week ending March 29, 2024, compared to $13.428 billion recorded a week earlier on March 22, 2024.
Analysts highlighted increased demand for the dollar as a key factor behind the slight depreciation of the rupee. This demand was driven by heightened import requirements and corporate payments. Foreign companies operating in Pakistan were observed acquiring dollars to repatriate profits and dividends to their parent companies abroad, thereby exerting pressure on the local currency. Additionally, a surge in import payments further bolstered the demand for the dollar.
Official statistics revealed a notable 9.25 percent increase in import payments to $4.73 billion in March 2024, compared to $4.33 billion in February 2024. This surge indicated a growing need for foreign currency to finance imports, consequently impacting the exchange rate.
Despite recent fluctuations, the rupee had witnessed gains against the dollar in previous weeks, primarily attributed to a decline in overall imports during the first nine months of the current fiscal year. According to the Pakistan Bureau of Statistics (PBS), exports exhibited significant growth, registering a 9 percent increase during the first nine months (July – March) of the fiscal year 2023-24. Exports during this period reached $22.91 billion, up from $21.04 billion in the corresponding months of the previous fiscal year.
As Pakistan continues to navigate its economic landscape, stakeholders closely monitor developments in foreign exchange markets, with concerted efforts aimed at maintaining stability and fostering sustainable growth. The stability of the Pakistani rupee amidst fluctuating external pressures underscores the resilience of the country’s economy and its ability to adapt to evolving global dynamics.
