Karachi, November 29, 2024 – The Pakistani rupee weakened marginally by one paisa against the US dollar, closing at PKR 278.05 in the interbank market on Friday. A day earlier, the rupee stood at PKR 278.04 per dollar.
This slight depreciation aligns with rising global oil prices, which continue to strain Pakistan’s economic stability. As a significant importer of crude oil and refined products, Pakistan’s economy remains vulnerable to fluctuations in international energy costs. Recent oil price increases have exacerbated pressures on foreign exchange reserves, already strained by heightened demand for industrial raw materials. Improved domestic economic activity has further amplified this demand, adding to the rupee’s challenges.
Analysts remain cautiously optimistic about the rupee’s medium-term outlook. They believe easing geopolitical tensions in the Middle East may stabilize global energy markets, indirectly reducing pressure on the Pakistani currency. Additionally, consistent export revenues and workers’ remittance inflows have helped cushion the rupee against sharper declines.
The State Bank of Pakistan (SBP) reported a $108 million increase in the country’s net foreign exchange reserves for the week ending November 22, 2024. Total forex reserves rose to $16.076 billion, up from $15.968 billion the previous week. The reserves of State Bank of Pakistan saw a $130 million increase, reaching $11.418 billion, reflecting stronger external inflows and enhancing Pakistan’s capacity to meet external debt obligations.
Experts emphasize the need for structural reforms to ensure long-term currency stability. Strengthening exports, diversifying the economy, and reducing reliance on short-term inflows are key priorities. Enhancing industrial capacity and fostering stronger trade partnerships could also bolster resilience against external shocks.
While rising reserves and remittance flows provide short-term relief, sustainable economic stability will require bold reforms by the government of Pakistan to build an export-driven economy and promote growth. The rupee’s future trajectory will depend on Pakistan’s ability to address these underlying vulnerabilities.