Karachi, November 6, 2024 – The Pakistani rupee slightly weakened on Wednesday, closing at PKR 277.89 against the U.S. dollar in the interbank foreign exchange market, marking a minor drop of 5 paisas from the previous day’s close of PKR 277.84. This modest dip is largely attributed to rising demand for the dollar, driven by corporate and import-related payments.
Despite this slight decline, financial analysts remain cautiously optimistic about the rupee’s trajectory. The stability in the rupee’s performance is supported by factors such as rising foreign exchange reserves and an improving trade balance. The State Bank of Pakistan (SBP) reported an increase of $32 million in foreign reserves, bringing the total to $16.049 billion as of October 25, 2024. The central bank’s reserves gained $115 million, a boost that offers some relief to Pakistan’s balance of payments and overall economic outlook.
In addition to bolstered reserves, Pakistan’s trade data provides further encouragement for the rupee’s stability. The Pakistan Bureau of Statistics (PBS) reported a 5.59% narrowing in the trade deficit for the first four months of the fiscal year (July to October 2024). This deficit shrank to $6.97 billion, down from $7.39 billion during the same period last year, highlighting robust export growth paired with controlled import spending.
Exports surged by 13.45% year-on-year, totaling $10.88 billion compared to last year’s $9.59 billion. This growth in exports, driven by higher demand in key markets, helped to balance a modest 5.17% increase in imports, which reached $17.85 billion. Together, this favorable export-import balance is bolstering the rupee’s position and providing optimism among currency market experts.
Currency analysts suggest that the rupee could experience greater stability if these positive trends continue. The recent improvements in foreign exchange reserves, combined with a shrinking trade deficit and stronger export growth, signal a supportive environment for the rupee amid ongoing economic recovery efforts. Higher dollar inflows from exports and remittances, along with moderated imports, create a promising backdrop for currency stability.
“A continuation of these trends could bolster the rupee’s stability in the near term,” noted one currency expert. “The combination of rising reserves and an improved trade position bodes well for Pakistan’s currency, especially if we maintain export momentum and controlled imports.”
Looking forward, the rupee’s performance will likely depend on sustained improvements in trade, continued forex reserve growth, and effective monetary policy from the SBP. With these factors aligned, the rupee stands on a relatively firm footing as Pakistan pursues broader economic reforms and stability in the foreign exchange market.
