Pakistani rupee further appreciates against US dollar

KARACHI: The Pakistani rupee continues to strengthen against the US dollar, marking a notable appreciation of 8 paisa in the Interbank market on the last day of the trading week on Friday.

The latest exchange rate reveals that the dollar concluded at Rs279.59 at the interbank market.

According to analysts, several factors are contributing to this ongoing trend of rupee appreciation against the US dollar.

Improvement in Current Account Balance

Pakistan has witnessed a positive shift in its current account balance, with a notable reduction in the trade deficit. Increased exports, remittances, and a controlled import bill have collectively contributed to a more favorable balance, positively impacting the value of the Pakistani rupee.

Remittance Inflows

Remittances from overseas Pakistanis have played a pivotal role in supporting the national economy. The consistent growth in remittance inflows provides a stable source of foreign exchange, boosting the country’s reserves and strengthening the rupee against major currencies, including the US dollar.

Economic Reforms

The government’s commitment to economic reforms, fiscal discipline, and prudent monetary policies has instilled confidence among investors and foreign lenders. These measures have attracted foreign investment, stabilizing the economy and fostering an environment conducive to currency appreciation.

International Support and Aid

Pakistan’s engagement with international financial institutions and friendly countries has resulted in financial assistance and support. This external aid has bolstered the country’s foreign exchange reserves, providing a cushion against external shocks and contributing to the strengthening of the Pakistani rupee.

Monetary Policy Adjustments

According to market observers, the State Bank of Pakistan, in its efforts to maintain monetary stability, may implement policies that influence the exchange rate. Adjustments in interest rates and other monetary tools can impact investor confidence and influence the demand for the Pakistani rupee.

The appreciation of the Pakistani rupee against the US dollar reflects a combination of domestic economic improvements, effective policy measures, and global economic dynamics.