Karachi, December 18, 2024 – On Wednesday, the Pakistani Rupee showed a slight but positive movement, reaching PKR 278.23 against the US dollar in the interbank foreign exchange market. This marked a modest gain of 4 paisas from the previous day’s closing of PKR 278.27 to the dollar, despite ongoing pressures stemming from strong import payment demands.
Currency market experts noted that the rupee had remained under pressure due to sustained dollar demand for import-related payments and corporate obligations. However, favorable sentiment regarding Pakistan’s improving balance of payments helped the currency edge up slightly. The country’s economic performance has been bolstered by positive developments on multiple fronts.
For the first time in several years, Pakistan has reported a significant current account surplus of $944 million for the five-month period from July to November of the fiscal year 2024-25. This contrasts sharply with the current account deficit of $1.68 billion seen in the same period last year, reflecting the country’s improved economic position.
Adding to the rupee’s relative stability is a modest increase in Pakistan’s foreign exchange reserves. The State Bank of Pakistan (SBP) reported a rise of $13 million in its reserves, which reached a total of $12.051 billion as of the week ending December 6, 2024, up from $12.038 billion the previous week. This small yet positive shift in reserves has contributed to growing investor confidence in the country’s currency market.
Another key driver behind the rupee’s resilience has been the remarkable growth in remittances from overseas Pakistanis. Between July and November 2024, remittances surged by 34% year-on-year, totaling $14.77 billion compared to $11.05 billion during the same period in the previous year. This influx of foreign exchange has provided essential liquidity, helping to stabilize the rupee and ease external financial pressures.
Looking ahead, analysts remain cautiously optimistic about the rupee’s short-term outlook. Government efforts to curb non-essential imports, along with strong remittance inflows, have provided temporary relief to the balance of payments. However, experts caution that sustainable currency stability will require deeper economic reforms, focusing on enhancing industrial productivity, diversifying export markets, and reducing reliance on short-term external borrowing. Addressing these long-term structural issues will be crucial for fostering a resilient economy and ensuring lasting stability for the rupee.