KARACHI – December 24, 2023: In the last week of 2023, experts believe the Pakistani rupee will likely stay steady against the US dollar. Starting December 26, 2023, this positive prediction is based on a good balance between how much people want and how much they have of the American currency, along with a smaller difference in the country’s spending and earnings.
Last week, the rupee’s value was 282.53 per dollar, a bit higher than Monday’s 283.21, according to the central bank’s information. This rise has continued despite challenges because the central bank is keeping things in balance, making sure we don’t spend more money than we earn.
This balanced approach has shown results in the recent positive performance of the country’s spending and earnings account. In November, we had $9 million more than we spent, which is much better than October when we spent $184 million more than we had.
Even though we’re doing well in spending and earning, our savings, known as foreign exchange reserves, are facing pressure because we need to pay back money we borrowed. From $12.9 billion in July, our savings have dropped a bit to $12 billion by December 15. This is happening even though we didn’t spend more than we earned in the first five months of this year, decreasing the difference by 64 percent compared to last year.
Exporters, or people who sell things to other countries, are happy with the stable situation. They are planning to get money for what they sell until the end of January because they think the value of the American dollar compared to our rupee will stay steady. They are avoiding the months when there might be big changes, like during elections.
The experts think the exchange rate will stay around 282 for the next month or so. This prediction depends on things like approval from the International Monetary Fund (IMF), keeping prices steady, making sure the value of our money compared to other countries stays reasonable, and having a stable political situation.
Even though the government is making sure we don’t spend more than we earn, this comes at a cost – there is no growth in how much our country is making. The government is choosing stability over growth while trying to control the rise in prices of things we buy, also known as inflation.
There are worries about the money we owe, which is $24 billion. We have a gap of $6 billion that we need to fill in the next seven months. Getting money from other countries is hard right now, making this a big challenge for our economy.
The State Bank of Pakistan (SBP), the country’s main bank, is actively working to help by managing how much extra we need to pay when we borrow money. They are also doing exchanges in the market to help balance things, guided by the International Monetary Fund (IMF). The SBP is making sure that exchange companies follow the rules, telling them to share the rates of money from different countries by December 26, 2023, to make things more transparent and trustworthy.
The SBP is serious about making sure things are fair and stable. They have canceled licenses of companies doing illegal things with money and allowed banks to open their own businesses for exchanging money.
As we go into the new week, people who are part of the market will closely watch what’s happening to understand how the value of our money compared to the American dollar is holding up. This will help them see how strong our money is in the face of ongoing economic challenges.
