Karachi, November 5, 2024 – The Pakistani rupee depreciated slightly by 5 paisas against the US dollar on Tuesday, settling at PKR 277.84 compared to the previous day’s closing rate of PKR 277.79 in the interbank market.
This minor drop is largely attributed to a strong demand for the dollar, fueled by ongoing corporate and import-related payments.
Despite this small decline, financial experts remain optimistic about the rupee’s performance in the near term. Factors such as rising foreign exchange reserves and a gradually improving trade balance suggest a stable outlook. According to the State Bank of Pakistan (SBP), foreign exchange reserves saw an increase of $32 million, reaching $16.049 billion as of October 25, 2024. This boost was supported by a gain of $115 million in SBP’s official reserves, offering some relief to the nation’s balance of payments.
Analysts cite positive trade data as another encouraging sign for the rupee. As reported by the Pakistan Bureau of Statistics (PBS), the trade deficit has narrowed by 5.59% during the first four months of the fiscal year (July to October 2024), reducing to $6.97 billion from $7.39 billion during the same period last year. This narrowing gap reflects robust export performance, alongside moderated import growth, which has provided support to the rupee.
Exports surged by 13.45% year-on-year during this period, reaching $10.88 billion compared to last year’s $9.59 billion. This improvement is linked to heightened demand in key export markets, which has helped offset a modest 5.17% rise in imports, now totaling $17.85 billion. This favorable export-import balance is strengthening the rupee’s position, inspiring confidence among currency experts.
Market observers believe that if these positive trends persist, the rupee could benefit from greater stability. The recent increase in foreign exchange reserves, coupled with a shrinking trade deficit and stronger export figures, signals cautious optimism. Higher dollar inflows from exports and remittances, in tandem with a controlled trade gap, create a supportive backdrop for the rupee amidst ongoing economic recovery efforts.
“A continuation of these trends could sustain the rupee’s stability in the near future,” commented a currency expert. “Rising reserves and an improved trade outlook are promising for Pakistan’s currency, especially if export momentum and import control measures are maintained.”
Amid ongoing economic reforms and a favorable external environment, the rupee’s stability will likely hinge on further trade improvements, sustained forex reserves, and strategic monetary policies by the SBP.
