Karachi, April 5, 2024 – The Pakistani Rupee (PKR) maintained its stability against the US dollar, closing unchanged at PKR 277.93 in the interbank foreign exchange market on Friday, despite prevailing demand for the dollar.
Currency analysts attribute the rupee’s resilience to the inflows, which counteracted the demand for the dollar, particularly for import and corporate payments. The positive sentiments surrounding the improvement in foreign exchange reserves held by the State Bank of Pakistan (SBP) also contributed to the rupee’s stability.
Official data revealed a marginal increase in the SBP’s foreign exchange reserves by $18 million, reaching $8.04 billion for the week ending March 29, 2024, compared to $8.022 billion in the previous week. However, the total foreign exchange reserves of the country experienced a decline of $49 million during the same period.
The SBP reported a decrease in the total foreign exchange reserves of the country to $13.379 billion by the week ending March 29, 2024, compared to $13.428 billion recorded a week earlier on March 22, 2024.
Analysts highlighted increased demand for the dollar as a key factor behind the slight depreciation, driven by heightened demand for import and corporate payments. Foreign companies operating in Pakistan were observed acquiring dollars to repatriate profits and dividends to their parent companies abroad, contributing to pressure on the local currency. Additionally, a surge in import payments further bolstered demand for the dollar.
Official statistics revealed a 9.25 percent increase in import payments to $4.73 billion in March 2024, compared to $4.33 billion in February 2024. This surge indicated a growing need for foreign currency to finance imports, impacting the exchange rate.
Despite recent fluctuations, the rupee had witnessed gains against the dollar in previous weeks, primarily attributed to a decline in overall imports during the first nine months of the current fiscal year.
According to the Pakistan Bureau of Statistics (PBS), exports exhibited significant growth, registering a 9 percent increase during the first nine months (July – March) of the fiscal year 2023-24. Exports during this period reached $22.91 billion, up from $21.04 billion in the corresponding months of the previous fiscal year.
As Pakistan continues to navigate its economic landscape, stakeholders closely monitor developments in foreign exchange markets, with concerted efforts aimed at maintaining stability and fostering sustainable growth.
The stability of the Pakistani rupee amidst fluctuating external pressures underscores the resilience of the country’s economy and its ability to adapt to evolving global dynamics.
