PkRevenue.com – The Pakistani rupee is expected to remain stable against the US dollar in the days leading up to the announcement of the 2024-25 budget, scheduled for June 7, 2024. Currency market analysts predict a steady exchange rate for the week starting June 3, 2024, driven by positive economic indicators.
Analysts highlight several factors contributing to this stability. Despite reports of potential tax hikes in the upcoming budget and a surge in dollar orders from importers, the rupee is anticipated to remain resilient. This resilience is attributed to significant improvements in the country’s external financial position.
One of the key factors supporting the rupee’s stability is the reduction in Pakistan’s import bill during the current fiscal year. This reduction has played a crucial role in narrowing the current account deficit, which has historically put pressure on the rupee. Additionally, the country’s foreign exchange reserves have stabilized, providing a buffer that enhances Pakistan’s ability to meet its external payment obligations.
“The positive trend in the external front is a strong signal that the rupee will maintain its ground against the dollar in the short term,” said one market analyst. “The reduction in the import bill has been a game-changer, easing pressure on our current account and supporting the local currency.”
However, analysts caution that this stability may be short-lived. They anticipate a potential depreciation of the rupee against the dollar with the start of the new fiscal year on July 1, 2024. The government has projected a GDP growth rate of over three percent for the next fiscal year, which, while promising, is expected to drive up domestic demand for imported raw materials and finished products. This increased demand for imports will, in turn, heighten the demand for dollars, potentially leading to a weaker rupee.
“In the longer term, the projected economic growth is likely to increase import demand, which could put pressure on the rupee,” noted another analyst. “The government’s ambitious growth targets will likely lead to higher dollar outflows to meet the needs of expanding industries and consumer markets.”
While the Pakistani rupee is poised to remain stable against the US dollar ahead of the 2024-25 budget announcement, the potential for depreciation exists as the new fiscal year begins. The interplay between positive economic indicators and increasing import demand will be crucial in determining the rupee’s trajectory in the coming months.
