Karachi, January 22, 2025 – The Pakistani rupee experienced a slight decline on Wednesday, falling by 3 paisas to reach PKR 278.85 against the US dollar in the interbank foreign exchange market. This marks a marginal drop from the previous day’s closing rate of PKR 278.82.
Currency experts attributed the minor depreciation to increased dollar demand for import and corporate payments. They observed that the improving domestic economic environment has led to a surge in import activity, which has, in turn, exerted pressure on the local currency. However, financial analysts remain optimistic about the rupee’s medium-term prospects, citing significant improvements in Pakistan’s external sector that could help stabilize the currency in the coming days.
One of the key factors supporting the rupee’s resilience is the notable week-on-week increase in Pakistan’s foreign exchange reserves. The State Bank of Pakistan (SBP) reported a $73 million rise in reserves, which now stand at $16.451 billion as of January 10, 2025, compared to $16.378 billion in the prior week. This growth reflects enhanced financial stability, offering a buffer against external economic pressures.
Another positive development is Pakistan’s shift from a current account deficit to a surplus. During the first half of the fiscal year 2024-25 (July–December 2024), the country achieved a current account surplus of $1.21 billion. This marks a remarkable turnaround from the $1.40 billion deficit recorded in the corresponding period of the previous fiscal year. The improvement underscores Pakistan’s progress in addressing structural imbalances in its external accounts, a trend welcomed by investors and market participants.
Additionally, remittance inflows from overseas Pakistanis have provided a crucial boost to the economy. During the first six months of FY2024-25, remittances surged by an impressive 38% year-on-year, reaching $17.85 billion compared to $13.44 billion in the same period last year. These inflows have not only bolstered foreign reserves but also mitigated the adverse impacts of external shocks, easing pressure on the rupee.
While challenges remain, the rupee’s performance is closely linked to key economic indicators such as foreign reserves, the current account balance, and remittance inflows. With sustained government focus on these areas, experts are hopeful that the rupee will maintain its stability, reflecting Pakistan’s overall economic health.
