Karachi, December 24, 2024 – The Pakistani rupee gained 10 paisas against the US dollar on Tuesday, closing at PKR 278.47, up from PKR 278.57 the previous day. This modest recovery comes amid persistent demand for the dollar, driven by higher outflows for imports and corporate payments, particularly as the year draws to a close.
Currency market analysts have linked the rupee’s rebound to increased inflows from export receipts and home remittances, which have provided crucial support despite the heightened dollar demand. They noted that the rupee’s performance remained resilient, even as businesses and importers were making substantial payments ahead of the year-end.
The outlook for the rupee remains cautiously optimistic, as economic indicators show signs of improvement. Notably, foreign exchange reserves have seen a slight increase. According to the State Bank of Pakistan (SBP), the country’s total liquid foreign exchange reserves reached $16.633 billion as of December 13, 2024, marking a modest rise of $32 million from the previous week. While the SBP’s reserves dipped slightly to $12.082 billion, compared to $12.51 billion the previous week, the overall trend suggests a gradual recovery.
A key factor behind this positive momentum is Pakistan’s improving external sector performance. The country recorded a current account surplus of $944 million during the first five months of the fiscal year 2024-25 (July-November), a sharp contrast to the $1.68 billion deficit in the same period last year. This significant turnaround is attributed to stronger trade balances and higher foreign inflows, contributing to the rupee’s stabilization.
Additionally, the growth in remittances has played a pivotal role in supporting the local currency. Between July and November 2024, remittances surged by 34%, reaching $14.77 billion, compared to $11.05 billion during the same period in 2023. This substantial rise in remittances has eased external financial pressures, bolstered domestic liquidity, and helped stabilize the rupee amidst ongoing challenges in the foreign exchange market.