Karachi, February 10, 2025 – The Pakistani rupee depreciated by 17 paisas against the US dollar on Monday, driven by increased foreign outflows related to import and corporate payment obligations.
The local currency settled at PKR 279.22 per dollar in the interbank market, compared to last Friday’s closing rate of PKR 279.05.
According to currency analysts, the rupee’s decline was largely attributed to rising dollar demand at the start of the week. Importers and corporations actively sought dollars for payments, putting downward pressure on the rupee. Market experts, however, remain optimistic that the rupee will regain stability in the coming days, supported by improving foreign exchange reserves and steady foreign inflows through exports and remittances.
The State Bank of Pakistan (SBP) reported an increase of $46 million in its foreign reserves for the week ending January 31, 2025. This brought the total reserves to $11.418 billion, up from $11.372 billion recorded on January 24. The strengthening of foreign reserves is viewed as a positive indicator, contributing to better liquidity management by the central bank. Higher reserve levels help reduce exchange rate volatility and bolster investor confidence, factors that could support the rupee in maintaining a stable trajectory.
Market observers suggest that if foreign inflows continue to improve, the rupee could witness an upward correction. A key driver of stability for the rupee has been Pakistan’s strong export performance. According to the Pakistan Bureau of Statistics (PBS), exports increased by 10% during the first seven months (July–January) of the fiscal year 2024-25, reaching $19.55 billion, compared to $17.78 billion in the corresponding period last year. This growth in export earnings plays a crucial role in narrowing trade deficits and reinforcing the rupee’s strength.
Additionally, the balance of payments has shown significant improvement, which bodes well for the rupee. During the first half of FY 2024-25 (July–December 2024), Pakistan recorded a current account surplus of $1.21 billion, in contrast to the $1.40 billion deficit observed in the same period last year.
Another critical factor supporting the rupee is the sharp rise in remittances sent by overseas Pakistanis. During the first half of FY 2024-25, remittances surged by 38%, reaching $17.85 billion compared to $13.44 billion in the previous year. The continued inflow of remittances has played a vital role in stabilizing the rupee and strengthening the country’s external account position.