Karachi, May 13, 2024 – The Pakistani Rupee encountered a setback on Monday, plummeting to PKR 278.20 against the US dollar, driven by heightened demand for imports and corporate payments.
The eight-paisa decline from last Friday’s closing rate of PKR 278.12 in the interbank foreign exchange market underscores the mounting pressure on the rupee due to increased dollar demand for import and corporate transactions, according to currency market experts.
Despite the short-term volatility, experts express confidence in the rupee’s resilience against the greenback in the coming days, citing robust economic indicators. Notably, recent data from the State Bank of Pakistan (SBP) unveiled a substantial rise in foreign exchange reserves, reaching $14.459 billion as of May 3, 2024. This surge, attributed primarily to a $1.1 billion disbursement by the International Monetary Fund (IMF) under its Stand-By Arrangement (SBA) program, bolsters Pakistan’s economic stability.
The infusion of IMF funds arrives at a pivotal juncture for Pakistan, which has been implementing multifaceted strategies to stabilize its economy. Notably, there has been a significant reduction in the trade deficit, as reported by the Pakistan Bureau of Statistics (PBS), shrinking by 17% year-on-year for the first ten months of fiscal year 2024, from $23.54 billion to $19.51 billion. This decline is regarded as instrumental in the nation’s fiscal well-being and is a cornerstone of its stabilization efforts.
Concurrently, Pakistan’s export sector has demonstrated resilience, registering a notable growth of 9.10% to reach $25.28 billion compared to the previous fiscal year’s $23.17 billion. This growth has been propelled by strategic pricing adjustments and successful market expansion initiatives.
An official from the Ministry of Commerce underscored the significance of these achievements, stating, “Exports play a pivotal role in foreign exchange earnings, employment generation, and industrial growth. Our efforts to enhance export competitiveness are yielding positive results amidst global economic challenges.”
Furthermore, the SBP highlighted the overall improvement in reserves, including a $36 million increment in the week ending April 26, bringing the total to $13.32 billion, providing a crucial buffer against external financial pressures. The SBP’s share of these reserves stood at $8.006 billion.
As the Pakistani Rupee navigates through temporary fluctuations, the outlook for the nation’s economy remains optimistic. With continued support from international financial institutions and effective domestic policies, Pakistan is poised to sustain its momentum towards greater economic resilience.
