Rupee Gains Ground by 8 Paisas Against Dollar

Rupee Gains Ground by 8 Paisas Against Dollar

Karachi, June 14, 2024 – The Pakistani Rupee on Friday strengthened against the US dollar, appreciating by eight paisas due to strong economic indicators. The interbank foreign exchange market closed at PKR 278.51 to the dollar, up from the previous day’s closing of PKR 278.59.

Currency analysts attributed the rupee’s appreciation to robust economic indicators and recent measures taken by the government in the 2024-25 budget. These budgetary steps are aimed at reducing the demand for imported goods and thereby strengthening the rupee’s value.

“The 2024-25 budget has introduced several measures to maintain the rupee’s stability,” said a currency analyst. “By discouraging non-essential imports, the government aims to reduce the demand for foreign currency, which helps in sustaining the rupee’s value.”

Throughout the day, the currency market experienced a demand for the dollar for import and corporate payments. Despite this, the rupee showed resilience, maintaining its slight gain against the US dollar. Experts believe this resilience is partly due to positive economic indicators such as a narrowing current account deficit and a reduction in the trade deficit.

“The improvement in the current account and trade deficits has provided some support to the rupee,” noted another currency expert. “These factors contribute to a more favorable balance of payments situation, which in turn helps stabilize the currency.”

The 2024-25 budget, announced recently, includes several strategic measures to curb non-essential imports, aiming to balance the country’s foreign exchange reserves and maintain the rupee’s value. These measures have bolstered market confidence, leading to the rupee’s appreciation.

However, experts also caution that the growth targets set for the next fiscal year could lead to increased demand for imported raw materials and essential items. This rise in demand for dollars might put pressure on the rupee, potentially causing its value to fall.

“As the economy grows, so will the demand for imports, particularly raw materials and essential goods,” the analyst added. “This could increase the demand for dollars, which might negatively impact the rupee’s value in the longer term.”