Karachi, March 18, 2024 – The Pakistani Rupee demonstrated resilience on Monday as it appreciated by PKR 0.11 against the US Dollar in the interbank foreign exchange market.
This notable increase was attributed to optimistic expectations regarding the successful completion of the review by the visiting team of the International Monetary Fund (IMF).
Closing at PKR 278.63 to the dollar, the rupee showed strength compared to its last Friday’s closing rate of PKR 278.74. Analysts pointed out that despite the first trading day of the week witnessing high demand for the dollar due to import and corporate payments, the local currency managed to strengthen, reflecting positive economic indicators.
The successful completion of the IMF review holds significant importance for Pakistan, as it paves the way for the disbursement of the second tranche amounting to $1.2 billion under the $3 billion Stand-By Arrangement (SBA). This infusion of funds is expected to provide crucial support to the country’s economy.
Analysts cited various factors contributing to the weakening of the dollar against the Pakistani Rupee. One notable factor is the increase in foreign inflows, coupled with improvements in foreign exchange reserves. According to data released by the State Bank of Pakistan (SBP), the country’s weekly foreign exchange reserves witnessed a substantial rise of $131 million for the week ending March 8, 2024. This surge pushed the reserves to $13.151 billion, indicating positive momentum in the economy.
Furthermore, Pakistan experienced a significant 13 percent Year-on-Year (YoY) growth in workers’ remittances during February 2024. Remittance data revealed a noteworthy increase to $2.25 billion, up from $1.99 billion recorded in the same period the previous year. This surge underscores the economic stability and resilience of the nation.
In addition to remittances, Pakistan’s exports saw a commendable 9 percent increase during the period of July to February 2023-24. Export figures climbed to $20.35 billion in the first eight months of the current fiscal year, compared to $18.67 billion in the corresponding period of the previous fiscal year. This growth not only strengthens the value of the rupee but also bodes well for the overall economic outlook.
The appreciation of the Pakistani Rupee against the US Dollar reflects a positive trend for the country’s economy, supported by growing foreign reserves, rising remittances, and expanding export volumes. These developments enhance investor confidence and contribute to macroeconomic stability, positioning Pakistan favorably in the global financial landscape.
As Pakistan continues its efforts to strengthen its economic fundamentals and attract foreign investment, the positive trajectory of the rupee against the dollar serves as a testament to the nation’s resilience and potential for sustained growth in the long run.
