Karachi, February 12, 2025 – The Pakistani rupee experienced a slight depreciation against the US dollar on Wednesday due to increased foreign payment obligations.
The rupee weakened by nine paisas, closing at PKR 279.26 per dollar compared to the previous day’s closing of PKR 279.17 in the interbank foreign exchange market.
Currency market analysts attributed the rupee’s decline to heightened demand for dollars, particularly for import and corporate payments. The demand for foreign currency rose as economic activities gained momentum, leading to an increased need for raw material imports. This uptick in imports placed additional pressure on the rupee, impacting its valuation against the dollar.
According to data from the Pakistan Bureau of Statistics (PBS), import payments surged by 10% in January 2025, reaching $5.23 billion compared to $4.76 billion in the same month last year. This increase in imports led to a higher outflow of dollars, further influencing the rupee’s exchange rate.
Despite the slight depreciation, experts remain optimistic about the rupee’s stability in the coming weeks. One of the key supporting factors for the rupee is the sustained growth in workers’ remittances. The State Bank of Pakistan (SBP) reported a significant 32% increase in remittance inflows during the first seven months (July–January) of the fiscal year 2024-25. These robust inflows have helped mitigate exchange rate volatility and provided crucial support to the rupee by ensuring a steady supply of foreign exchange.
Another factor strengthening the rupee is the improvement in Pakistan’s foreign exchange reserves. The SBP recorded an increase of $46 million in reserves for the week ending January 31, 2025, bringing total reserves to $11.418 billion. Higher reserves improve the central bank’s liquidity management capabilities and enhance the rupee’s resilience against external financial pressures.
Market experts suggest that continued foreign inflows and stronger export performance will play a crucial role in maintaining rupee stability. According to the PBS, Pakistan’s exports rose by 10% during the first seven months of FY 2024-25, reaching $19.55 billion compared to $17.78 billion in the previous year. This positive trend helps narrow the trade deficit and reinforces the rupee’s position in the forex market. If these trends persist, the rupee may see more stability in the near future, despite short-term fluctuations caused by import pressures.