Karachi, December 11, 2024 – The Pakistani rupee weakened slightly on Wednesday, depreciating by 12 paisas to close at PKR 278.17 against the US dollar in the interbank foreign exchange market. This decline follows the previous day’s closing rate of PKR 278.05 per dollar.
Currency market analysts attributed the rupee’s mild drop to increased demand for the dollar, driven by rising import payments and corporate settlements as the end of the calendar quarter approaches on December 31, 2024. However, they remain optimistic that robust inflows from exports and worker remittances will likely mitigate further devaluation in the short term.
The State Bank of Pakistan (SBP) recently reported an impressive 34% year-on-year growth in home remittances during the first five months of the current fiscal year (July–November 2024-25). Total remittances reached $14.77 billion, compared to $11.05 billion during the same period in the previous year. This remarkable increase reflects the unwavering commitment of overseas Pakistanis in supporting the domestic economy, acting as a vital buffer against external pressures on the rupee.
Additionally, Pakistan’s foreign exchange reserves have seen notable improvements, providing further stability. As of November 29, 2024, the country’s reserves climbed to $16.62 billion, marking a weekly increase of $544 million. This growth was largely supported by a $500 million inflow from the Asian Development Bank (ADB). The SBP’s reserves alone rose by $619 million during the week, reaching $12.038 billion, up from $11.419 billion recorded the previous week.
Experts remain cautiously optimistic about the rupee’s near-term trajectory. Growth in remittances, coupled with government efforts to curb non-essential imports, has helped stabilize the balance of payments, providing support to the local currency.
However, analysts stress the need for structural economic reforms to ensure sustained stability. Key measures include improving industrial productivity, diversifying export markets, and reducing dependence on short-term external borrowing. These reforms are critical for solidifying Pakistan’s economic foundation and enhancing the rupee’s resilience in the face of global economic uncertainties.
As Pakistan continues to navigate fiscal challenges, the rupee’s performance remains a key barometer of economic stability and progress.