Karachi, December 13, 2024 – The Pakistani rupee recovered 11 paisas on Friday, closing at PKR 278.12 against the US dollar in the interbank foreign exchange market. This recovery follows a decline to PKR 278.23 a day earlier, marking the rupee’s third consecutive dip against the greenback.
Currency market experts attributed the modest rebound in the rupee’s value to an uptick in foreign exchange reserves held by the State Bank of Pakistan (SBP). According to official data, the SBP’s reserves rose by $13 million, reaching $12.051 billion for the week ending December 6, 2024, compared to $12.038 billion a week prior. This increase, though slight, reflects improved confidence in the currency market.
A significant contributor to this improvement has been the surge in remittances from overseas Pakistanis. During the first five months of the current fiscal year (July–November 2024-25), home remittances grew by an impressive 34% year-on-year, totaling $14.77 billion compared to $11.05 billion in the same period last year. This robust growth underscores the critical role of remittances in bolstering Pakistan’s economy, providing much-needed foreign exchange inflows to stabilize the currency and mitigate external financial pressures.
Experts remain cautiously optimistic about the rupee’s short-term trajectory. The rise in remittances, coupled with government measures to curb non-essential imports, has alleviated some pressure on the balance of payments. These developments have lent temporary stability to the local currency. However, analysts stress that long-term resilience requires structural economic reforms. Key areas for reform include enhancing industrial productivity, diversifying export markets, and reducing dependency on short-term external borrowing.
The experts also elaborated that the improvement in economic indicators would escalate the demand for imported raw materials, which would pressure the rupee value.
Such measures are essential to strengthening Pakistan’s economic foundation and insulating the rupee from external shocks. With global economic uncertainties persisting, policymakers face the challenge of implementing these reforms to ensure sustained economic stability and growth.