Karachi, May 3, 2024 – The Pakistani Rupee (PKR) strengthened to close at PKR 278.21 against the US dollar today, reflecting a positive shift driven by a significant contraction in the trade deficit and an uptick in exports.
The rupee, which had closed at PKR 278.30 against the dollar the previous day, recorded a modest gain of PKR 0.09 in the interbank foreign exchange market. Experts in the currency market are attributing this improvement to the narrowed trade deficit, which has seen a reduction of 17 percent over the first ten months of fiscal year 2024, according to recent data from the Pakistan Bureau of Statistics (PBS).
From July 2023 to April 2024, the trade deficit stood at $19.51 billion, down from $23.54 billion during the same period in the previous year. This contraction is considered a significant step forward in stabilizing the country’s economic situation.
Additionally, the PBS highlighted a robust increase in exports, which rose by 9.10 percent to reach $25.28 billion during the period under review, compared to $23.17 billion in the corresponding months of the last fiscal year. This growth has been supported by competitive pricing and an expansion into new markets, indicating a resilient performance across various sectors of Pakistan’s economy.
Another factor contributing to the rupee’s strength is the improvement in Pakistan’s foreign exchange reserves. According to the latest figures from the State Bank of Pakistan (SBP), the country’s total foreign reserves stood at $13.32 billion as of the week ending April 26, 2024. This figure represents a slight increase of $36 million from the previous week’s reserves of $13.28 billion.
Of the total reserves, the SBP’s reserves saw an increment of $25 million, settling at $8.006 billion up from $7.981 billion. This modest rise in the central bank’s reserves signals a cautious yet optimistic turn in the nation’s fiscal management amidst ongoing economic challenges.
The incremental gains in both the value of the rupee and the national reserves are seen as encouraging signs by economic analysts. These improvements reflect the government’s efforts in managing economic pressures through better trade balances and enhanced fiscal policies. The positive economic indicators are anticipated to bolster investor confidence and pave the way for more sustainable economic growth in Pakistan.