Karachi, July 19, 2024 – The Pakistani Rupee on Friday recovered 4 paisas against the US dollar, buoyed by an improvement in the country’s foreign exchange reserves. The rupee closed at PKR 278.13 to the dollar, compared to the previous day’s closing of PKR 278.17 in the interbank foreign exchange market.
Analysts noted the resilience of the rupee against the dollar, particularly on the last trading day of the week, when the rupee typically faces pressure due to a surge in dollar demand for import and corporate payments. This resilience was largely attributed to the improvement in foreign exchange reserves.
The State Bank of Pakistan (SBP) reported that the country’s weekly foreign exchange reserves increased by $59 million. As of the week ended July 12, 2024, the forex reserves rose to $14.704 billion, up from $14.645 billion the previous week on July 5, 2024.
The central bank highlighted that its official reserves increased by $19 million, reaching $9.424 billion as of July 12, compared to $9.405 billion the previous week. Additionally, foreign exchange reserves held by commercial banks saw a notable rise of $40 million, totaling $5.28 billion, up from $5.24 billion during the same period.
This positive development follows Pakistan’s recent staff-level agreement (SLA) with the International Monetary Fund (IMF) for a $7 billion Extended Fund Facility (EFF). While the IMF’s executive board still needs to approve the disbursement of the loan, the anticipation of these funds has already positively influenced market sentiment.
Analysts are optimistic about the impact of the IMF loan on Pakistan’s rupee stability. They believe that the release of the funds will not only bolster the country’s foreign exchange reserves but also enhance the outlook for the rupee’s stability.
The IMF agreement is seen as a crucial step towards stabilizing Pakistan’s economy, which has been grappling with a persistent current account deficit and high inflation. The expected inflow of funds from the IMF, coupled with the improved foreign exchange reserves, is likely to provide the necessary support to the rupee in the coming months.
In summary, the Pakistani Rupee’s recovery of 4 paisas against the US dollar reflects improved foreign exchange reserves and the positive market sentiment surrounding the IMF agreement. As the country navigates through economic challenges, these developments offer a glimpse of hope for greater financial stability and a more robust rupee in the near future.