Karachi, December 31, 2024 – The Pakistani rupee on Tuesday concluded the year 2024 with a marginal depreciation, closing at PKR 278.55 against the US dollar in the interbank market.
This represents a slight decline of 7 paisas compared to the previous day’s closing rate of PKR 278.48, reflecting minor market adjustments rather than substantial economic turmoil.
Currency analysts highlighted the rupee’s relative stability throughout the year, attributing it to consistent dollar inflows that effectively counterbalanced heightened demand for imports and corporate settlements. This slight depreciation underscores routine market fluctuations typical at the year-end, as businesses finalize payments and settle accounts.
The State Bank of Pakistan (SBP) recently reported a reduction in foreign exchange reserves, which dropped by $262 million within a week. As of December 20, 2024, Pakistan’s reserves stood at $16.371 billion, down from $16.633 billion on December 13. This decline presents challenges to maintaining external stability, yet the rupee demonstrated resilience, stabilizing in the face of these pressures.
Encouragingly, Pakistan’s external sector has exhibited marked improvement. Between July and November 2024, the country achieved a current account surplus of $944 million, a stark contrast to the $1.68 billion deficit recorded during the same period in 2023. This shift highlights a significant rebalancing of the economy, lending robust support to the rupee and bolstering market confidence.
Additionally, remittances from overseas Pakistanis surged, providing a critical lifeline for the economy. During the first five months of the fiscal year 2024-25, remittances grew by 34%, totaling $14.77 billion, compared to $11.05 billion during the same period last year. These inflows have significantly enhanced domestic liquidity, playing a vital role in mitigating external financial pressures and stabilizing the rupee’s value.
Despite challenges such as falling reserves and global market volatility, the rupee’s position has been reinforced by improved trade dynamics and robust foreign inflows. While external pressures remain, these positive economic indicators suggest cautious optimism for the rupee’s trajectory in the coming year.
Economic stakeholders and policymakers will continue to monitor these developments closely, ensuring that fiscal and monetary measures align with the nation’s evolving financial landscape.