Karachi, May 23, 2024 – The Pakistani Rupee rebounded on Thursday, reaching PKR 278.30 against the US dollar after a three-day consecutive decline. This gain of 17 paisas from the previous day’s closing of PKR 278.47 in the interbank foreign exchange market marks a positive turn for the local currency.
Currency analysts attribute this uptick in rupee against dollar to a combination of improved economic indicators that have bolstered market sentiment. A key factor underpinning this optimism is Pakistan’s current account surplus for April 2024. The surplus, which indicates that the country is exporting more goods and services than it imports, reflects stronger economic fundamentals and has boosted confidence in the market. Essentially, it suggests that Pakistan is generating enough foreign exchange through its exports to cover its import bills, a reassuring sign for the rupee’s stability.
Moreover, Pakistan’s foreign exchange reserves have seen a notable increase to help rupee make gain against the dollar. According to the State Bank of Pakistan (SBP), reserves have risen to a more comfortable level, thereby enhancing the country’s ability to manage external economic shocks and meet international payment obligations. This rise in reserves acts as a crucial buffer, providing much-needed confidence to investors and further supporting the rupee.
Another positive influence on the rupee is the ongoing dialogue with the International Monetary Fund (IMF) regarding a new loan program. These discussions aim to secure financial assistance to bolster Pakistan’s economic reforms and stabilization efforts. Positive progress in these negotiations has also contributed to mitigating the downward pressure on the rupee and improving investor confidence.
Market participants and currency traders remain cautiously optimistic about the rupee’s near-term prospects. They believe that if the trends of rising foreign exchange reserves and a consistent current account surplus continue, the rupee could stabilize or even appreciate slightly in the coming weeks.
However, analysts caution that external factors could still impact the rupee’s value. Fluctuations in global oil prices and geopolitical developments remain significant variables. Given Pakistan’s reliance on imported oil, changes in international oil prices can substantially affect the country’s trade balance and foreign exchange reserves, thereby influencing the rupee’s stability.
