Karachi, June 27, 2024 – The Pakistani Rupee recorded a modest gain of two paisas on Thursday, reaching PKR 278.38 against the dollar in the interbank foreign exchange market.
The rupee had closed at PKR 278.40 against the dollar a day earlier.
Currency experts attribute this slight gain to a combination of factors. Importers, while still requiring dollars for foreign payments, have adopted a more cautious approach in their buying activities. This cautious stance has helped to balance the demand for dollars from the corporate sector. Additionally, a steady inflow of export receipts has provided some support for the rupee.
Analysts remain hopeful about the rupee’s stability in the near future, particularly as the current fiscal year (2023-24) draws to a close. This optimism stems largely from the recent increase in Pakistan’s foreign exchange reserves. The State Bank of Pakistan (SBP) reported a rise of $31 million in reserves over the past week, bringing the total to $14.415 billion as of June 14, 2024.
The growth in reserves is seen as a positive indicator for the Pakistani economy. Higher reserves enhance the country’s ability to meet its foreign obligations and contribute to the stability of the local currency. “These factors, combined with the inflow of export receipts and remittances, have been crucial in supporting the rupee,” stated a senior currency analyst.
Economic analysts also highlight the potential impact of recent measures outlined in the 2024-25 budget. These measures appear to have made importers more cautious when placing new orders, leading to a reduction in immediate dollar demand and contributing to the rupee’s stability.
The SBP’s efforts to bolster foreign exchange reserves are seen as critical for maintaining economic stability. Increased reserves not only support the rupee but also bolster investor confidence, fostering a more stable economic environment.
As the fiscal year nears its conclusion, market participants will continue to monitor key factors such as foreign exchange reserves, import activity levels, and export and remittance inflows. These factors will significantly influence the trajectory of the rupee in the coming weeks.
Overall, the rupee’s recent gain reflects a cautious optimism in Pakistan’s financial markets. This is supported by prudent fiscal and monetary policies aimed at ensuring continued economic stability.
While the rupee’s gain may be nominal, it underscores the resilience of Pakistan’s financial system in the face of various economic challenges. The ongoing efforts to maintain and increase foreign exchange reserves, coupled with cautious fiscal management, are crucial steps toward achieving long-term economic stability and currency strength.