Karachi, November 7, 2024 – The Pakistani rupee edged down by 6 paisas on Thursday, closing at PKR 277.95 against the U.S. dollar in the interbank market, a minor weakening from the prior day’s rate of PKR 277.89.
This slight depreciation reflects heightened dollar demand, driven primarily by corporate and import-related foreign payments.
Despite this modest slide, financial analysts are cautiously optimistic about the rupee’s longer-term prospects, citing robust foreign exchange reserves and a narrowing trade deficit as key stabilizing factors. The State Bank of Pakistan (SBP) reported an increase of $32 million in foreign reserves, bringing total reserves to $16.049 billion as of October 25, 2024. The central bank’s reserves saw a notable gain of $115 million, offering a degree of resilience against external economic pressures and enhancing Pakistan’s balance of payments position.
Encouraging trade data also supports a stable outlook for the rupee. According to the Pakistan Bureau of Statistics (PBS), the trade deficit narrowed by 5.59% over the first four months of the fiscal year (July–October 2024), reaching $6.97 billion compared to $7.39 billion in the same period last year. This reduction in the deficit is attributed to a substantial 13.45% year-on-year increase in exports, which totaled $10.88 billion, up from $9.59 billion. The expansion in exports, spurred by rising demand in key international markets, helped to counterbalance a controlled 5.17% increase in imports, which reached $17.85 billion.
This favorable export-import balance has strengthened the rupee’s fundamentals, generating a cautiously optimistic outlook among currency market experts. Higher inflows from exports and remittances, alongside controlled import expenditures, have provided essential support for the rupee. Analysts suggest that, if these positive economic trends persist, the rupee may find greater stability in the months ahead.
“A sustained improvement in trade figures and continued foreign exchange inflows from exports could support a more stable rupee,” commented one currency analyst. “The growth in reserves and trade deficit reduction create a favorable backdrop for the rupee, particularly if we maintain export momentum and manage import levels effectively.”
Looking ahead, the rupee’s performance will likely hinge on ongoing improvements in trade, continued growth in foreign reserves, and strategic monetary policies from the SBP. As Pakistan implements broader economic reforms, a steady stream of export earnings and remittances, coupled with moderated import demands, could help maintain stability in the foreign exchange market. With these elements aligned, the rupee’s trajectory remains relatively firm as Pakistan strives for sustained economic stability and growth.
