Karachi, January 23, 2025 – The Pakistani rupee exhibited a modest recovery on Thursday, gaining 13 paisas against the US dollar in the interbank market, supported by improved foreign inflows.
The rupee closed at PKR 278.72, up from the previous day’s closing of PKR 278.85.
Currency experts attributed this recovery to a combination of enhanced export receipts and robust remittance inflows. The acceleration of economic activities has bolstered the confidence of exporters and overseas Pakistanis, encouraging increased financial contributions to Pakistan’s economy. Experts remain optimistic about the rupee’s medium-term outlook, citing notable improvements in Pakistan’s external sector that could sustain currency stability in the coming weeks.
A significant factor underpinning the rupee’s resilience is the week-on-week increase in foreign exchange reserves. According to the State Bank of Pakistan (SBP), reserves rose by $73 million, reaching $16.451 billion as of January 10, 2025, compared to $16.378 billion the previous week. This rise highlights enhanced financial stability, providing a critical buffer against external economic pressures.
Another encouraging development is Pakistan’s transition 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 represents a remarkable turnaround from the $1.40 billion deficit recorded during the same period last fiscal year. The improvement reflects Pakistan’s efforts to address structural imbalances in its external accounts, earning confidence from investors and market participants alike.
Moreover, remittance inflows from overseas Pakistanis have played a crucial role in strengthening the economy. In the first six months of FY2024-25, remittances surged by an impressive 38% year-on-year, totaling $17.85 billion compared to $13.44 billion in the corresponding period last year. These inflows have not only augmented foreign reserves but have also helped mitigate the effects of external economic shocks, alleviating pressure on the rupee.
While challenges persist, the rupee’s performance remains closely tied to key economic indicators such as foreign reserves, the current account balance, and remittance inflows. With sustained government focus on these areas, experts are optimistic that the rupee will maintain its stability, reflecting broader progress in Pakistan’s economic health.