Karachi, August 19, 2024 – The Pakistani rupee gained 10 paisas against the US dollar on Monday, closing at PKR 278.44 in the interbank foreign exchange market, up from last Friday’s close of PKR 278.54. This modest appreciation is attributed to improved inflows from exports and remittances, alongside a narrowing current account deficit.
Currency experts highlighted the positive impact of a shrinking current account deficit for July 2024, which significantly bolstered the rupee’s value. The deficit was reduced by a sharp 78%, from $741 million in July 2023 to just $162 million in July 2024, driven by strong export performance and a surge in remittances. This improvement has been a critical factor in stabilizing the rupee.
The State Bank of Pakistan (SBP) reported a substantial increase in the country’s foreign exchange reserves, further supporting the rupee’s upward movement. As of the week ending August 9, 2024, the reserves had risen by $173 million, reaching $14.65 billion. This marked a significant improvement from the previous week’s figure of $14.472 billion. Specifically, the SBP’s official reserves saw an increase of $119 million, bringing the total to $9.272 billion from $9.153 billion.
Experts are optimistic about the rupee’s stability in the near future, citing positive economic sentiment and improved foreign inflows as key contributors. The combination of a reduced current account deficit, increased foreign exchange reserves, and strong export receipts suggests a favorable outlook for the rupee in the coming days.
The consistent improvement in foreign exchange reserves reflects a positive trend for the country’s economy, reinforcing the belief that the rupee may continue to stabilize. With significant inflows from exports and remittances, the rupee’s recent gains are expected to hold steady, providing a much-needed boost to Pakistan’s economic outlook.
As the country continues to benefit from improved foreign inflows, experts anticipate that the rupee will maintain its strength, supported by ongoing efforts to manage the current account deficit and bolster foreign exchange reserves. The combination of these factors suggests a more resilient economic environment, with the potential for further appreciation of the rupee in the weeks ahead.