Karachi, January 29, 2024 – The Pakistani Rupee (PKR) experienced a slight decline of PKR 0.05 against the US Dollar on Monday, marking the beginning of the trading week.
The rupee concluded at PKR 279.64 to the dollar, a marginal shift from last Friday’s closing rate of PKR 279.59 in the interbank foreign exchange market.
Currency analysts attributed the dip in the rupee to the resumption of market activities after the two-weekly holidays. The increased demand for the dollar for import and corporate payments influenced the foreign exchange rates at the start of the week.
Despite this minor depreciation, experts expressed confidence in the rupee’s resilience in the coming days, citing recent external inflows as a contributing factor. Notably, a substantial injection of $700 million from the International Monetary Fund (IMF) has played a pivotal role in supporting the stability of the Pakistani currency.
The financial boost from international sources, combined with robust fiscal policies, has been instrumental in safeguarding the Pakistani currency amid uncertainties in the global economic landscape.
One noteworthy outcome of these developments is the significant surge in Pakistan’s foreign exchange reserves. According to the State Bank of Pakistan (SBP), reserves witnessed an impressive increase of $36 million, reaching $13.257 billion by the week ending January 5, 2024, compared to $13.221 billion recorded on December 29, 2023.
While this increase in reserves is undoubtedly positive, financial analysts emphasize the importance of a comprehensive perspective. Despite the improvement, reserves still fall behind the levels observed in August 2021. This underscores the necessity for continued scrutiny of Pakistan’s reserves to understand the factors influencing this positive trend.
Market observers will closely monitor the currency dynamics in the upcoming days, considering the balance between external inflows, domestic demand, and global economic conditions. The resilience of the Pakistani rupee will likely remain a focal point for investors and policymakers alike, contributing to the overall economic stability of the country.
