The Pakistani Rupee exhibited strength against the US Dollar on Friday, gaining five paisas in the interbank foreign exchange market, with the exchange rate closing at Rs138.84 to the dollar.
This positive development is attributed to the narrowing current account deficit, which has bolstered the local currency.
In comparison to the previous day’s closing rate of Rs138.89, the Pakistani Rupee demonstrated resilience by finishing the trading day at a slightly improved rate, reflecting the positive sentiment prevailing in the currency market.
Currency experts have pointed to the significant role played by the shrinking current account deficit in facilitating the Rupee’s gain. The current account deficit refers to the balance of trade, which tracks the difference between a country’s exports and imports. A reduction in the current account deficit signifies that Pakistan is exporting more than it imports, which, in turn, strengthens the Rupee’s position against the US Dollar.
The day commenced in the interbank foreign exchange market with the Rupee trading in a range of Rs138.89 to Rs138.91 against the US Dollar. The market experienced fluctuations throughout the day, with the highest exchange rate recorded at Rs138.90 and the lowest at Rs138.83. Ultimately, the Rupee settled at Rs138.84, reflecting the sustained strength of the local currency.
In contrast, the exchange rate for the US Dollar in the open market remained unchanged, indicating stability in this segment of the currency market. This stability can be attributed to various factors, including the policies of the State Bank of Pakistan and market dynamics.
In the cash-free market, the buying and selling rates for the US Dollar were noted at Rs138.80 and Rs139.30, respectively. These rates are essential for businesses and individuals who need foreign currency for various purposes, such as international trade, travel, or remittances.
The strengthening of the Pakistani Rupee against the US Dollar is a positive indicator for the country’s economy. A robust and stable currency is essential for both foreign investors and local businesses. It promotes economic stability, lowers the cost of imports, and can potentially attract foreign investment.
A narrowing current account deficit is a key driver behind the Rupee’s recent gains. The government’s efforts to enhance exports and reduce imports, as well as improvements in the balance of payments, have contributed to this positive trend. Additionally, international factors, such as changes in the global exchange rate environment and the demand for Pakistani goods and services, also play a role in determining the Rupee’s value.
Market participants will be closely monitoring future developments in the currency exchange rate. Factors such as global economic conditions, geopolitical events, and monetary policy decisions will continue to influence the exchange rate, making it a dynamic and closely watched aspect of Pakistan’s financial landscape.
