Karachi, December 6, 2024 – The Pakistani rupee slipped to PKR 278.01 against the US dollar on Friday, driven by increased dollar demand for imports and corporate payments ahead of the weekend, currency dealers reported.
The rupee weakened by 7 paisas compared to its previous closing rate of PKR 277.94 in the interbank foreign exchange market. Analysts attributed this depreciation to heightened dollar requirements despite encouraging economic indicators.
One of the key positive developments was the rise in Pakistan’s foreign exchange reserves, which reached $16.62 billion as of November 29, 2024, marking a weekly increase of $544 million. This growth was primarily fueled by a $500 million inflow from the Asian Development Bank (ADB), which significantly bolstered the central bank’s reserves. The official reserves held by the State Bank of Pakistan (SBP) surged by $619 million during the week, climbing to $12.038 billion compared to $11.419 billion recorded on November 22, 2024.
Currency experts expressed cautious optimism about the rupee’s prospects, citing several supportive macroeconomic factors. Rising remittance inflows continue to provide vital foreign exchange, while government measures to curb non-essential imports have helped stabilize the balance of payments. These factors are expected to contribute to the rupee’s stability in the coming weeks.
However, experts warned against complacency, emphasizing the need for long-term structural reforms to ensure sustained economic stability. Key areas of focus include enhancing industrial production, diversifying the economy to reduce import reliance, and minimizing dependence on short-term external debt. Strengthening these sectors is crucial for fortifying Pakistan’s economic foundation and improving its global competitiveness.
Additionally, sustainable fiscal policies and export-driven growth strategies remain essential. Addressing systemic challenges such as fiscal deficits, industrial capacity constraints, and governance issues will be pivotal in safeguarding the economy from future volatility. Experts advocate for a comprehensive reform agenda to build economic resilience and achieve long-term growth.
Despite short-term fluctuations, the rupee’s trajectory remains linked to the successful implementation of these critical measures.