Rupee Shows Resilience Amid Improving Economy, But Risks Remain Ahead of Elections

• Rupee has appreciated 0.84% against dollar since start of 2024 on improved macro conditions • Trade deficit narrowed 30% in January as exports rose 27% and imports fell 4% • Inflation eased slightly to 28.34% in January from 29.66% in December • SBP kept policy rate unchanged at 22% citing inflation risks • Rupee expected to maintain resilience due to positive trade balance, though elections and low reserves pose risks