Karachi, January 16, 2025 – The Pakistani rupee continued its downward trend against the US dollar on Thursday, closing at PKR 278.86 in the interbank foreign exchange market.
This marks a 9-paisa decline from the previous day’s closing rate of PKR 278.77, extending the rupee’s losing streak for the week.
Currency analysts attribute the rupee’s depreciation to elevated demand for the dollar, driven by increased import payments and dwindling foreign exchange reserves. Although remittance inflows provide periodic relief, the overall economic environment remains strained, reflecting broader challenges facing Pakistan’s financial stability.
The State Bank of Pakistan (SBP) reported a $31 million decline in foreign exchange reserves for the week ending January 3, 2025. Total reserves now stand at $16.378 billion, down from $16.409 billion the previous week. This consistent reduction in reserves has intensified pressure on the rupee, highlighting the urgent need for fiscal and monetary policy reforms to stabilize the currency and strengthen economic resilience.
Despite these challenges, remittance inflows continue to act as a critical buffer. During the first half of FY2024-25 (July–December), remittances from overseas Pakistanis surged to $17.85 billion, representing a 38% year-on-year increase compared to $13.44 billion in the same period last year. The substantial growth underscores the crucial role of the Pakistani diaspora in supporting the national economy and partially mitigating the impact of declining reserves.
However, the rising import bill remains a major obstacle for the rupee’s stability. According to the Pakistan Bureau of Statistics (PBS), imports surged by 17.44% in December 2024, with the monthly import bill climbing to $5.29 billion from $4.50 billion in November. This sharp increase in dollar demand to finance imports has further eroded the rupee’s value, heightening concerns over the country’s economic stability.
Looking forward, the trajectory of the rupee will depend on the interplay of remittance inflows, shrinking reserves, and escalating import payments. Policymakers face the critical task of implementing robust strategies to enhance foreign exchange reserves, curb import dependency, and stabilize the currency. Achieving long-term economic stability will require coordinated efforts to address these persistent financial challenges effectively.
Rupee Depreciation Persists, Closes at PKR 278.86 Against Dollar
Karachi, January 16, 2025 – The Pakistani rupee continued its downward trend against the US dollar on Thursday, closing at PKR 278.86 in the interbank foreign exchange market. This marks a 9-paisa decline from the previous day’s closing rate of PKR 278.77, extending the rupee’s losing streak for the week.
Currency analysts attribute the rupee’s depreciation to elevated demand for the dollar, driven by increased import payments and dwindling foreign exchange reserves. Although remittance inflows provide periodic relief, the overall economic environment remains strained, reflecting broader challenges facing Pakistan’s financial stability.
The State Bank of Pakistan (SBP) reported a $31 million decline in foreign exchange reserves for the week ending January 3, 2025. Total reserves now stand at $16.378 billion, down from $16.409 billion the previous week. This consistent reduction in reserves has intensified pressure on the rupee, highlighting the urgent need for fiscal and monetary policy reforms to stabilize the currency and strengthen economic resilience.
Despite these challenges, remittance inflows continue to act as a critical buffer. During the first half of FY2024-25 (July–December), remittances from overseas Pakistanis surged to $17.85 billion, representing a 38% year-on-year increase compared to $13.44 billion in the same period last year. The substantial growth underscores the crucial role of the Pakistani diaspora in supporting the national economy and partially mitigating the impact of declining reserves.
However, the rising import bill remains a major obstacle for the rupee’s stability. According to the Pakistan Bureau of Statistics (PBS), imports surged by 17.44% in December 2024, with the monthly import bill climbing to $5.29 billion from $4.50 billion in November. This sharp increase in dollar demand to finance imports has further eroded the rupee’s value, heightening concerns over the country’s economic stability.
Looking forward, the trajectory of the rupee will depend on the interplay of remittance inflows, shrinking reserves, and escalating import payments. Policymakers face the critical task of implementing robust strategies to enhance foreign exchange reserves, curb import dependency, and stabilize the currency. Achieving long-term economic stability will require coordinated efforts to address these persistent financial challenges effectively.