Karachi, November 1, 2024 – The Pakistani rupee gained 15 paisas against the US dollar on Friday, ending the day at PKR 277.70 in the interbank foreign exchange market, up from the previous close of PKR 277.85.
The uptick in the rupee’s value is attributed to improved dollar inflows, strengthening Pakistan’s external sector position with an increase in foreign exchange reserves and a shrinking trade deficit.
Currency analysts pointed to a series of favorable economic indicators supporting the rupee’s performance. The State Bank of Pakistan (SBP) reported a modest increase of $32 million in foreign exchange reserves over the past week. By October 25, 2024, total reserves had reached $16.049 billion, up from $16.017 billion recorded on October 18. This increase was largely driven by a $115 million rise in SBP’s official reserves, which grew to $11.156 billion from $11.041 billion over the week.
The rupee’s appreciation has also been buoyed by encouraging trade data from the Pakistan Bureau of Statistics (PBS). Pakistan’s trade deficit shrank by 5.59% in the first four months of the fiscal year 2024-25 (July-October), narrowing to $6.97 billion compared to $7.39 billion in the same period last year. This reduction in the trade deficit has improved the balance of payments outlook, contributing to a stronger rupee.
The PBS report showed that exports rose significantly, surging by 13.45% year-on-year to reach $10.88 billion from $9.59 billion in the previous year. This boost in exports reflects growing demand in key markets, helping to offset a more modest increase in imports, which rose by 5.17% to $17.85 billion. The tempered import growth and robust export performance collectively contributed to the positive trade balance and bolstered confidence in the rupee.
Currency experts expressed optimism regarding the rupee’s stability in the coming days, encouraged by the improving economic landscape. With foreign exchange reserves on the rise, a narrowing trade deficit, and stronger exports, there is hope that the rupee could maintain its strength against the dollar in the near future.
The rupee’s recent appreciation highlights the impact of enhanced dollar inflows and suggests a cautiously optimistic outlook for Pakistan’s currency stability amid ongoing economic improvements. If current trends in exports, foreign reserves, and the trade deficit persist, the rupee could continue to benefit from these positive economic indicators.
