Karachi, May 15, 2024 – The Pakistani Rupee (PKR) experienced a slight setback against the US Dollar on Wednesday, reaching PKR 278.26 in the interbank foreign exchange market, marking a decline of 8 paisas from the previous day’s closing at PKR 278.18.
Currency analysts have attributed this decline in rupee to the escalating demand for the dollar, primarily driven by import and corporate payments. The business community has reportedly been accelerating import orders, anticipating potential rises in duties and taxes in the upcoming budget for the fiscal year 2024-25.
Despite these short-term fluctuations in rupee value, experts remain optimistic about the exchange rate stabilizing by June 30, 2024. This optimism stems from the significant improvement in Pakistan’s foreign exchange reserves, as indicated by recent data released by the State Bank of Pakistan (SBP).
The SBP revealed that as of May 3, 2024, Pakistan’s foreign exchange reserves surged to $14.459 billion, largely due to a $1.1 billion disbursement by the International Monetary Fund (IMF) under its Stand-By Arrangement (SBA) program. This injection of funds has bolstered Pakistan’s economic stability, providing a crucial buffer against external financial pressures.
This influx of IMF funds coincides with Pakistan’s concerted efforts to stabilize its economy. Notably, there has been a notable reduction in the trade deficit, with data from the Pakistan Bureau of Statistics (PBS) indicating a 17% year-on-year decrease for the first ten months of fiscal year 2024, shrinking from $23.54 billion to $19.51 billion. This decline is viewed as instrumental in fortifying the nation’s fiscal health.
Concurrently, Pakistan’s export sector has demonstrated resilience, recording a commendable growth of 9.10% to reach $25.28 billion compared to the previous fiscal year’s $23.17 billion. Strategic pricing adjustments and successful market expansion initiatives have propelled this growth, underlining Pakistan’s efforts to enhance export competitiveness.
An official from the Ministry of Commerce underscored the significance of these achievements, stating, “Exports play a pivotal role in foreign exchange earnings, employment generation, and industrial growth. Our efforts to enhance export competitiveness are yielding positive results amidst global economic challenges.”
Furthermore, the SBP has noted an overall improvement in reserves, with a $36 million increment in the week ending April 26, bringing the total to $13.32 billion. The SBP’s share of these reserves stood at $8.006 billion.
As Pakistan continues to navigate economic challenges, the uptick in foreign exchange reserves, coupled with positive trade indicators, offers a ray of hope for sustained economic stability and growth. The slight fluctuation in the Pakistani Rupee against the dollar underscores the resilience of Pakistan’s economy amidst global uncertainties.