Karachi, January 30, 2025 – The Pakistani rupee weakened by 10 paisas against the US dollar on Thursday, impacted by foreign outflows driven by import and corporate payments.
The rupee closed at PKR 278.97 per dollar, slipping from the previous day’s closing of PKR 278.87 in the interbank foreign exchange market.
Currency analysts attribute the decline in the rupee’s value to an increased demand for the dollar in meeting import obligations and corporate financial commitments. They warn that persistent pressure from ongoing import-related payments continues to strain the rupee, limiting its capacity for recovery.
In recent days, the rupee has undergone considerable depreciation due to multiple economic pressures. A primary concern has been the strain on Pakistan’s foreign exchange reserves, which have led to heightened volatility in the exchange rate. According to the State Bank of Pakistan (SBP), the country’s foreign exchange reserves fell by $262 million in the week ending January 17, 2025. This decline reduced the total net reserves from $16.451 billion to $16.189 billion. Analysts highlight this reduction in reserves as a key factor behind the rupee’s weakness, given the continued high demand for foreign currency to finance imports and corporate transactions.
Despite these short-term setbacks, some encouraging economic indicators suggest a potential stabilization in the long term. One positive development is Pakistan’s improving balance of payments. In the first half of the fiscal year 2024-25 (July-December 2024), the country recorded a current account surplus of $1.21 billion, marking a substantial recovery from the $1.40 billion deficit reported in the same period last year. This shift indicates progress in addressing Pakistan’s economic imbalances and may help bolster investor confidence.
Additionally, remittance inflows from overseas Pakistanis have played a crucial role in sustaining the country’s foreign exchange reserves. During the first half of FY2024-25, remittances surged by 38%, totaling $17.85 billion compared to $13.44 billion in the corresponding period of the previous year. These inflows provide essential support to Pakistan’s economy, helping counterbalance external financial pressures and contributing to a more stable outlook for the rupee moving forward.