Karachi, January 10, 2025 – The Pakistani rupee recorded a slight improvement, gaining 3 paisas against the US dollar by the close of the interbank foreign exchange market on Friday. The rupee concluded trading at PKR 278.58 to the dollar, compared to the previous day’s closing rate of PKR 278.61.
Currency analysts observed that while the rupee remained under strain due to a decline in foreign exchange reserves, the growth in remittances provided some relief, allowing the currency to recover slightly. This minor appreciation of the rupee underscores the ongoing challenges faced by Pakistan’s economy.
The State Bank of Pakistan (SBP) reported a $31 million reduction in the country’s net foreign exchange reserves during the week ending January 3, 2025. As a result, Pakistan’s total forex reserves stood at $16.378 billion, down from $16.409 billion as of December 27, 2024. This consistent depletion of reserves has heightened pressure on the rupee, reflecting the critical need for strategic measures to stabilize the currency.
Amid these challenges, remittances from overseas Pakistanis emerged as a key factor supporting the rupee. During the first half of the fiscal year 2024-25 (July–December), Pakistan received $17.85 billion in remittances, marking a remarkable 38% year-on-year increase compared to $13.44 billion in the same period last fiscal year. This robust growth highlights the resilience and contribution of the Pakistani diaspora to the national economy.
However, the rupee’s value remains vulnerable due to the mounting import bill. Data from the Pakistan Bureau of Statistics (PBS) revealed a sharp 17.44% rise in imports during December 2024, with the monthly import bill reaching $5.29 billion, up from $4.50 billion in November. The increasing demand for dollars to settle import payments continues to exert downward pressure on the rupee, underscoring the need for effective economic reforms.
The delicate balance between remittance inflows and external pressures like declining reserves and rising imports will play a critical role in determining the rupee’s trajectory in the coming months. The government and policymakers face the challenge of implementing measures to bolster foreign reserves while addressing the persistent demand for dollars to stabilize the rupee effectively.