Karachi, May 6, 2024 – The Pakistani Rupee exhibited slight depreciation against the US dollar on Monday, closing at PKR 278.24 in the interbank foreign exchange market.
This represents a marginal decline in rupee of three paisas compared to the previous close of PKR 278.21 on Friday, May 3, 2024.
Experts attributed the minor fluctuation to increased import activity and corporate demand for dollars on the first trading day of the week. However, they expressed optimism for the rupee’s stability in the coming days due to several positive economic indicators.
One key factor bolstering confidence is the upcoming visit by the International Monetary Fund (IMF) team to Pakistan. This engagement is expected to provide further support to the country’s economic reforms.
Furthermore, the narrowing trade deficit is seen as a significant development. According to the Pakistan Bureau of Statistics (PBS), the trade deficit for the first ten months of fiscal year 2024 contracted by 17% compared to the same period in the previous year. This reduction, from $23.54 billion to $19.51 billion, signifies a crucial step towards economic stabilization.
The PBS data also highlighted a robust export performance, with a 9.10% increase to $25.28 billion during the reviewed period compared to $23.17 billion in the corresponding months of the last fiscal year. This growth is attributed to competitive pricing strategies and expansion into new markets, showcasing the resilience of various sectors within Pakistan’s economy.
Another factor contributing to the rupee’s potential strength is the improvement in foreign exchange reserves. The State Bank of Pakistan (SBP) reported total foreign reserves of $13.32 billion as of April 26, 2024, reflecting a slight increase of $36 million from the previous week. The SBP’s reserves also witnessed a modest rise, settling at $8.006 billion.
These incremental gains in both the rupee’s value and the national reserves are viewed positively by economic analysts. They represent the government’s efforts to manage economic pressures through improved trade balances and enhanced fiscal policies. The positive economic trajectory is expected to bolster investor confidence and pave the way for more sustainable economic growth in Pakistan.
