Karachi, August 8, 2024 – The Pakistani Rupee made a slight recovery on Thursday, gaining 4 paisas against the US dollar in the interbank market. The rupee closed at PKR 278.69 per dollar, a modest improvement from the previous day’s rate of PKR 278.73.
Currency experts attributed this minor gain to a decrease in dollar demand for import payments, which eased pressure on the rupee. Despite the small increase, the overall outlook for the rupee remains optimistic, supported by recent positive trends in the country’s foreign exchange reserves and encouraging economic indicators.
As of July 26, 2024, the State Bank of Pakistan (SBP) reported a rise in official reserves, which increased by $75 million, bringing the total to $9.102 billion, up from $9.027 billion the previous week. This growth reflects the central bank’s ongoing efforts to stabilize the economy amid global and domestic financial challenges. The SBP has been actively intervening in the market to curb speculative trading and ensure sufficient liquidity, contributing to the rupee’s resilience.
In addition to the boost in reserves, data from the Pakistan Bureau of Statistics (PBS) showed a significant reduction in the trade deficit for July 2024. The deficit narrowed by 19.05% to $1.95 billion, down from $2.41 billion in June. This improvement was driven by a 14.27% decrease in import costs, which fell to $4.26 billion in July from $4.96 billion the previous month. However, exports also declined by approximately 10%, dropping to $2.31 billion from $2.56 billion. Despite the fall in exports, the reduction in the trade deficit is viewed as a positive step towards achieving a more balanced trade position.
Looking ahead, the rupee is expected to benefit from anticipated inflows under the International Monetary Fund (IMF) loan program. The IMF’s financial support is likely to further bolster Pakistan’s foreign reserves, providing additional strength to the currency. This support, combined with the government’s proactive economic measures, is expected to enhance investor confidence and contribute to a more stable economic environment.
Overall, the recent improvements in reserves and the reduction in the trade deficit present a promising outlook for the rupee. Continued government efforts and international backing are expected to sustain this positive momentum, ensuring a stable and resilient economic future for Pakistan.