The Pakistani rupee is anticipated to remain stable and trade within a range in the upcoming week, supported by improved dollar inflows and market optimism following the conclusion of discussions with the International Monetary Fund (IMF) on its $7 billion loan program.
On Monday, the rupee closed at 277.86 per dollar in the interbank market. By Friday, it had recovered slightly, settling at 277.66. This trend is attributed to an increase in remittances, bolstered foreign exchange reserves, and positive market sentiment linked to the IMF’s visit to Pakistan.
The IMF delegation visited Pakistan from November 12 to 15 to evaluate the country’s progress on economic policies and reforms under the ongoing Extended Fund Facility (EFF). The talks centered on measures to reduce vulnerabilities and establish a foundation for sustainable growth.
Market insights indicate that the dollar index has shown strength, rising for seven consecutive weeks with a 5.8% increase. This has placed significant pressure on major global currencies, including the euro, British pound, and yen. Even the Indian rupee reached a record low of 84.43 against the US dollar.
In contrast, the Pakistani rupee has demonstrated relative stability, showing minimal fluctuations in free-market trading. Forward swap rates, though firm, remain less attractive for exporters, with rates at 120 paisa and 245 paisa for one-month and three-month tenors, respectively.
On the reserves front, Pakistan’s central bank reported an $84 million increase in foreign exchange reserves, bringing the total to $11.26 billion as of November 8. Overall reserves, including commercial bank holdings, rose by $34 million to $15.966 billion. However, commercial bank reserves experienced a $50 million decline, settling at $4.707 billion.
The combination of steady inflows, robust policy support, and a cautious but optimistic market outlook is expected to support the rupee’s stability in the near term. This trend will be closely monitored as global financial markets and domestic economic developments evolve.
