Karachi, February 18, 2025 – The Pakistani rupee continued its decline against the US dollar on Tuesday, as it closed lower in the interbank foreign exchange market.
The rupee depreciated by 10 paisas, ending the day at PKR 279.37 to the dollar, compared to the previous day’s closing of PKR 279.27. Currency experts pointed to a rising demand for dollars driven by import and corporate payments, which led to the rupee’s slight fall. The increased demand for raw materials, spurred by improving economic activities, has exacerbated the pressure on the rupee. At the same time, concerns over dwindling foreign exchange reserves continue to weigh on the stability of the local currency.
Despite this recent dip, experts remain cautiously optimistic about the rupee’s medium-term outlook. They emphasize that steady foreign inflows, including remittances and export receipts, continue to provide crucial support, acting as buffers against any larger depreciation. The rupee has shown resilience in the face of external pressures, largely thanks to these inflows.
The State Bank of Pakistan (SBP) recently reported a decline of $252 million in the country’s foreign exchange reserves. As of February 7, 2025, reserves stood at $11.166 billion, down from $11.418 billion the previous week. The SBP attributed this drop to external debt payments and other financial commitments. While such outflows can create short-term pressure on the rupee, experts suggest that the overall economic fundamentals remain strong, providing confidence in the rupee’s stability.
The growth in remittance inflows has been a key factor in supporting the rupee. Official data reveals a 32% increase in remittances during the first seven months of the fiscal year 2024-25, which has significantly helped bolster foreign reserves and strengthen the rupee.
Additionally, the country’s export performance has been favorable for the rupee. According to the Pakistan Bureau of Statistics (PBS), exports grew by 10% during the July-January period, reaching $19.55 billion, up from $17.78 billion last year. This growth has contributed to narrowing the trade deficit and alleviating some of the pressure on the rupee.
Looking forward, analysts believe that the rupee’s trajectory will depend largely on sustained remittance growth, continued export expansion, and careful management of foreign reserves. While the rupee may face occasional pressure from import-related dollar demand, the overall economic indicators suggest a positive outlook for the Pakistani rupee in the near future.