Karachi, November 19, 2024 – The Pakistani rupee extended its losing streak on Tuesday, closing at PKR 277.95 against the US dollar in the interbank market, down by 9 paisas from Monday’s close of PKR 277.86.
This marks the second consecutive day of depreciation during the week, as the rupee grapples with increased dollar demand.
Currency analysts attribute the decline to a surge in foreign payment obligations, including imports and profit repatriation by corporations. However, optimism persists regarding the rupee’s stability, supported by a current account surplus. The State Bank of Pakistan (SBP) reported a $349 million surplus in October 2024, a significant improvement from the $287 million deficit in the same month last year. This marks the third consecutive month of surplus, largely driven by robust remittance inflows.
Mohammed Sohail, CEO of Topline Securities, highlighted a 7% month-on-month (MoM) and 24% year-on-year (YoY) increase in remittances during October, boosting the country’s foreign exchange reserves. During the first four months of FY25 (July-October), remittances surged by 35% YoY to $11.85 billion, compared to $8.79 billion in the same period last year. This inflow underscores the critical role of overseas Pakistanis in stabilizing the rupee and strengthening the nation’s foreign reserves.
Steady export performance has also contributed to currency stability. Combined with rising remittances, strong export receipts have eased pressure on Pakistan’s external account. The SBP’s latest report showed an $84 million increase in official foreign reserves, which now stand at $11.257 billion, reflecting gradual improvement in the external financial position.
Despite these positive developments, analysts caution that global economic uncertainties, including fluctuating commodity prices and tightening international financial conditions, continue to pose challenges for sustained reserve accumulation and currency stability.
In the near term, the rupee’s performance will depend on maintaining a healthy balance of inflows from remittances, exports, and other foreign currency sources. Policymakers must remain vigilant in managing external pressures while capitalizing on the current account surplus to build a more robust and resilient economic framework.
