Karachi, December 21, 2023 – The Pakistani Rupee (PKR) maintained its upward trajectory on Thursday, registering a steady rise against the US dollar to reach PKR 282.79 in the interbank foreign exchange market.
This marks a commendable gain of PKR 0.11 compared to the previous day’s closing rate of PKR 282.90 against the dollar.
Financial analysts point to various factors contributing to the Rupee’s consistent appreciation, with recent data on the balance of payments released by the State Bank of Pakistan (SBP) emerging as a pivotal driver in this upward trend.
Despite the challenges posed by ongoing import activities and corporate payments, the Rupee has showcased resilience, underpinned by positive economic indicators signaling a more stable financial landscape. One notable factor fortifying 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 experienced a remarkable 64.46 percent reduction in its CAD, amounting to $1.16 billion. This stands in stark contrast to the $3.26 billion recorded during the corresponding period in the previous fiscal year. Analysts attribute this substantial decline to a marked reduction in the trade deficit, indicating positive trends in the country’s economic performance.
Experts highlight the surge in Pakistan’s foreign exchange reserves as another key factor supporting the Rupee’s ascent. Recent data indicates a noteworthy increase of $99 million in the country’s foreign exchange reserves for the week ending December 8, 2023. This positive development not only signifies a robust trajectory for economic indicators but also reinforces confidence in the stability of the local currency.
The consistent growth in foreign exchange reserves assumes particular significance, bolstering Pakistan’s capacity to meet international payment obligations and enhancing the overall economic outlook. Augmented reserves act as a safeguard against external economic shocks, instilling confidence among investors and traders alike.
The recent appreciation of the Rupee aligns with broader initiatives aimed at fortifying the country’s economic resilience and navigating 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 its incremental gains against the US Dollar, stakeholders and market participants are vigilantly monitoring these developments. The stability and resilience exhibited by the local currency play a pivotal role in sustaining economic growth and attracting investment. The positive economic indicators serve as a solid foundation for optimism and confidence in Pakistan’s financial future.
