Rupee Sheds 11 Paisas to Reach PKR 278.51 Against Dollar

Rupee Sheds 11 Paisas to Reach PKR 278.51 Against Dollar

Karachi, July 10, 2024 – The Pakistani Rupee depreciated by 11 paisas to settle at PKR 278.51 against the US dollar at the close of trading in the Interbank foreign exchange market on Wednesday.

This decline marks a slight drop from the previous day’s closing rate of PKR 278.40.

Currency analysts attribute the rupee’s weakening to heightened demand for dollars, driven primarily by increased imports and corporate payments. Importers, in particular, have bolstered demand by placing substantial orders with foreign suppliers, exerting pressure on the local currency.

Despite the recent decline, analysts remain optimistic about the rupee’s stability in the near term. They point to the bolstering of Pakistan’s foreign exchange reserves and an improved balance of trade situation as factors likely to support the rupee.

The State Bank of Pakistan (SBP) recently reported a significant increase of $494 million in its official foreign exchange reserves for the week ending June 28, 2024. This surge lifted the central bank’s total reserves to $9.39 billion by the end of June, up from $8.896 billion a week earlier on June 21. The rise underscores Pakistan’s strengthened external financial position amid ongoing economic developments.

According to the SBP, the rise in reserves primarily reflects inflows from various multilateral agencies, indicating growing confidence and support from international financial entities towards Pakistan’s economic stability and growth prospects.

Market analysts have also noted positive trends in Pakistan’s trade performance. Data from the Pakistan Bureau of Statistics (PBS) reveals that exports surged by 10.54 percent to $30.65 billion in fiscal year 2023-24, up from $27.72 billion in the previous fiscal year. Meanwhile, imports experienced a modest decline of 0.84 percent, amounting to $54.73 billion in FY24 compared to $55.20 billion in FY23. This reduction in the trade deficit by 12.32 percent to $24.09 billion in FY24, down from $27.47 billion in the previous fiscal year, signifies encouraging progress for Pakistan’s balance of payments and overall economic stability.

Economic experts anticipate that these positive economic indicators, coupled with expanding foreign exchange reserves, will likely bolster the rupee against the dollar in the forthcoming months, providing a stable outlook for Pakistan’s currency and economic resilience amidst global economic shifts.