Karachi, August 22, 2024 – The Pakistani rupee experienced a minor dip against the US dollar on Thursday, closing at PKR 278.67 in the interbank market, a decline of 15 paisas from the previous day’s rate of PKR 278.52.
Currency experts have attributed the depreciation to increased demand for dollars, driven primarily by import payments. Importers are currently under pressure to meet their financial obligations, which has led to a surge in dollar purchases, subsequently weakening the rupee.
Adding to the pressure on the rupee, the country recently faced an internet disruption that adversely affected the export of IT and IT-related services. The disruption has delayed payments and transactions, causing further strain on the local currency.
Despite this recent volatility, there is cautious optimism among currency analysts regarding the rupee’s stability in the short term. This optimism is bolstered by a significant reduction in Pakistan’s current account deficit, which saw a sharp decline of 78% in July 2024. The deficit narrowed to $162 million, down from $741 million in the same month last year, driven by robust export growth and a rise in remittances.
The State Bank of Pakistan (SBP) has also reported a positive trend in the country’s foreign exchange reserves. For the week ending August 9, 2024, reserves increased by $173 million, bringing the total to $14.65 billion, up from $14.472 billion the previous week. The SBP’s official reserves alone grew by $119 million, reaching $9.272 billion.
These encouraging economic indicators have led analysts to maintain a stable outlook for the rupee. The significant decrease in the current account deficit, along with the rise in foreign exchange reserves, provides a buffer that is expected to help stabilize the rupee’s value against the dollar in the coming days.
Market observers will continue to monitor these developments closely, with the hope that the rupee will recover some of its recent losses, supported by favorable economic trends and government measures aimed at managing external pressures effectively.
