Karachi, December 12, 2024 – The Pakistani rupee continued its downward trend on Thursday, depreciating by another 6 paisas against the US dollar in the interbank foreign exchange market. The currency closed at PKR 278.23 to the dollar, compared to the previous day’s closing of PKR 278.17. This marks the rupee’s third consecutive decline against the greenback.
Currency market analysts attribute this weakening in rupee value to heightened demand for the dollar, fueled by rising import payments and corporate settlements as the end of the calendar quarter on December 31, 2024, approaches. Despite this, analysts remain cautiously optimistic that robust inflows from exports and worker remittances could limit further devaluation in the near term.
Recent data from the State Bank of Pakistan (SBP) highlights the significant role of remittances in propping up the economy. During the first five months of the current fiscal year (July–November 2024-25), home remittances surged by an impressive 34% year-on-year, reaching $14.77 billion compared to $11.05 billion in the same period last year. This growth underscores the continued commitment of overseas Pakistanis to supporting the domestic economy, providing a crucial buffer against external economic pressures.
Additionally, Pakistan’s foreign exchange reserves have shown notable improvements, further contributing to economic stability. As of November 29, 2024, the country’s reserves increased to $16.62 billion, reflecting a weekly rise of $544 million. This uptick was largely driven by a $500 million inflow from the Asian Development Bank (ADB). The SBP’s reserves alone grew by $619 million over the week, reaching $12.038 billion from $11.419 billion recorded previously.
Experts maintain cautious optimism about the rupee’s short-term trajectory. The combination of rising remittances and government measures to curb non-essential imports has eased pressure on the balance of payments, lending some stability to the local currency. However, they emphasize the importance of implementing structural economic reforms to ensure sustained resilience. These include enhancing industrial productivity, diversifying export markets, and reducing reliance on short-term external borrowing. Such measures are critical for strengthening Pakistan’s economic foundation and safeguarding the rupee against global economic uncertainties.