Karachi, December 19, 2023 – The Pakistani Rupee (PKR) continued its upward trend against the US dollar on Wednesday, closing at PKR 282.90 in the interbank foreign exchange market.
This marks a gain of PKR 0.11 in rupee value from the previous day’s closing rate of PKR 283.01.
Financial analysts attribute the consistent appreciation of the Rupee to several factors, with recent data on the balance of payments released by the State Bank of Pakistan (SBP) being a key driver.
Despite ongoing import and corporate payments, the Rupee has demonstrated resilience, supported by positive economic indicators that signal a more stable financial landscape.
One pivotal factor contributing to the Rupee’s strength is the significant contraction in the Current Account Deficit (CAD). In the first five months (July – November) of the fiscal year 2023-24, Pakistan witnessed a substantial 64.46 percent reduction in its CAD, reaching $1.16 billion. This stands in contrast to the $3.26 billion recorded during the same period in the previous fiscal year. Analysts attribute this noteworthy decline to a considerable reduction in the trade deficit, indicating positive trends in the country’s economic performance.
Experts also emphasize the surge in Pakistan’s foreign exchange reserves as a key factor supporting the Rupee. Recent data reveals a notable increase of $99 million in the country’s foreign exchange reserves for the week ending December 8, 2023. This positive development signals a robust trajectory for economic indicators and reinforces confidence in the stability of the local currency.
The consistent growth in foreign exchange reserves holds particular significance, enhancing Pakistan’s capacity to meet international payment obligations and strengthening the overall economic outlook. Increased reserves act as a buffer against external economic shocks, fostering confidence among investors and traders.
The recent appreciation of the Rupee aligns with broader efforts to bolster the country’s economic resilience and navigate global economic uncertainties. Positive trends in the balance of payments and foreign exchange reserves contribute to an optimistic outlook for Pakistan’s economic stability and financial well-being.
As the Rupee continues to make incremental gains against the US Dollar, stakeholders and market participants are closely monitoring these developments. The stability and resilience of the local currency play a crucial role in sustaining economic growth and attracting investment. The positive economic indicators provide a foundation for optimism and confidence in Pakistan’s financial future.
