Karachi, January 21, 2025 – The Pakistani rupee weakened to PKR 278.82 against the US dollar on Tuesday, driven by heightened foreign payment demand for the greenback.
The rupee fell by 17 paisas from the previous day’s closing rate of PKR 278.65 in the interbank foreign exchange market.
Currency experts attributed the rupee’s decline to increased dollar demand for import and corporate payments. They noted that the improving economic environment had led to a surge in import payments, further pressuring the rupee. However, experts remain optimistic, suggesting that strong external sector improvements could stabilize the rupee in the coming days.
One positive factor supporting the rupee is the week-on-week increase in Pakistan’s net foreign exchange reserves. The State Bank of Pakistan (SBP) reported a $73 million rise in reserves, reaching $16.451 billion as of January 10, 2025, compared to $16.378 billion the previous week. This upward trend is a promising sign of Pakistan’s growing financial stability amidst global economic challenges.
Additionally, Pakistan achieved a significant current account surplus of $1.21 billion during the first half of the fiscal year 2024-25 (July–December 2024). This is a remarkable improvement from the $1.40 billion deficit recorded during the same period of the previous fiscal year. The shift underscores Pakistan’s strides toward achieving a more balanced external account, a development welcomed by investors and financial analysts.
The rupee’s resilience is further bolstered by a sharp rise in remittance inflows. During the first six months of FY2024-25, remittances surged by 38% year-on-year, totaling $17.85 billion compared to $13.44 billion in the corresponding period last year. These substantial inflows from overseas Pakistanis have played a crucial role in strengthening the economy, mitigating the adverse effects of external shocks, and easing pressure on foreign reserves.
While challenges persist, the rupee’s performance is closely tied to economic indicators such as foreign reserves, the current account balance, and remittance inflows. The government’s continued focus on these areas is expected to provide further support to the rupee, which remains a vital barometer of Pakistan’s economic health.