In a noteworthy financial turnaround, the Pakistani Rupee (PKR) displayed resilience in the opening trade on Thursday, rebounding against the US Dollar after a series of depreciations.
The Rupee commenced trading reflecting a notable recovery of 20 paisas against the US Dollar, settling at Rs279.30 paisa.
2024 a positive start for rupee
The positive momentum continued throughout January, closing at Rs279.5, marking a substantial gain of 0.84% or 2.36 rupees against the robust Dollar. Analysts attribute this impressive performance to a confluence of factors contributing to the stability of the Pakistani Rupee.
Improved macroeconomic conditions played a pivotal role, supported by enhanced liquidity in the foreign exchange market. This liquidity surge was a result of stringent regulatory measures, a reduction in the money supply, and a notable balance of payments surplus due to decreased import demand. Additionally, a moratorium on Chinese debt repayments further bolstered the economic landscape.
Market sentiments were lifted by the recent disbursement of the second installment of SDR 528 million, equivalent to $705.6 million, from the International Monetary Fund (IMF). This injection of funds provided an additional cushion to the country's economic position.
A significant turning point was witnessed in December when Pakistan recorded a current account surplus, breaking a streak of five consecutive months of deficits. The last reported surplus dated back to June 2023. This favorable development was underpinned by a surge in both the exports of goods and services, with the Information Technology (IT) sector emerging as a notable contributor to the overall economic growth.
As the nation ushers in 2024 on a positive note, the resilience of the Pakistani Rupee against the US Dollar reflects the prudent economic measures and strategic initiatives undertaken by the authorities, providing a ray of optimism for the financial landscape in the coming months.
