Karachi, November 25, 2024 – The Pakistani rupee remained stable against the US dollar on Monday, despite elevated demand for the greenback due to import payments.
The rupee closed at PKR 277.75 to the dollar, slightly unchanged from Friday’s close of PKR 277.76 in the interbank market.
Currency analysts noted that the beginning of the week typically exerts pressure on the rupee, driven by higher dollar demand for imports. However, strong inflows from export receipts and worker remittances helped stabilize the currency by the end of the trading day.
Experts remain optimistic about the rupee’s stability, attributing this outlook to steady inflows from exports and remittances. Additionally, the increasing foreign exchange reserves of the State Bank of Pakistan (SBP) have bolstered confidence in the rupee’s performance.
The SBP reported a $29 million rise in its foreign exchange reserves during the week ending November 15, 2024, reflecting improving economic stability. The reserves increased to $11.288 billion from $11.259 billion the previous week, highlighting the central bank’s efforts to strengthen Pakistan’s external position amid ongoing macroeconomic challenges.
Export receipts have played a crucial role in stabilizing the rupee, contributing to an $84 million increase in official reserves, which now stand at $11.257 billion. These improvements have offered some relief for the country’s external financial obligations.
Market observers highlighted that the rupee’s stability has positively influenced investor confidence, leading to modest recoveries in the equity markets. However, they emphasized the importance of addressing structural weaknesses in Pakistan’s export sector and reducing dependence on short-term financial inflows to sustain this momentum.
The rupee’s position has also benefited from a consistent rise in remittances, with increased inflows from overseas Pakistanis boosting foreign exchange reserves. While these factors provide temporary relief, analysts caution that sustainable progress requires structural reforms, particularly in export-driven industries, to diversify the economy and reduce vulnerability to external shocks.
Despite recent gains, challenges persist. Global economic uncertainty, fluctuating commodity prices, and geopolitical risks remain potential threats. Analysts underscore the need for policies that enhance export competitiveness, attract foreign direct investment, and diversify remittance channels to ensure long-term economic stability and growth.
